LONDON, July 9: Gold rose on Monday, aided by firm oil and base metals prices and a weaker dollar, but the precious metal needs to regain $660 an ounce to prove it has turned its back on recent three-month lows, analysts said.

Traders said fund buying had triggered automatic buy orders in early trade, but some feared gold may still lack the necessary traction to take it back into safer territory.

Oil and copper momentum indicators are saying they are overbought at these levels...if either dip we could see gold lose ground, one said.

Spot gold was quoted at the day's peak so far of $657.25/657.75 a troy ounce up from New York's late traded $653.80/654.60 on Friday.

Prices fell as low as $645 at the end of last week, before rebounding to $655. They are currently up just three percent since the end of last year and well off this year's peak of $693.60 hit in April.

John Reade, metals analyst at UBS Investment Bank, said the subsequent bounce off June's low had generated confidence.

Returning risk appetite may also be helping gold and silver, he added, noting that oil and base metals prices, along with the weaker dollar were all stimulating buying.

Oil prices moved off last week's 11-month high on Monday, with London's brent crude down 60 cents at $75.02, but not far from Friday's peak at $76.01.

London Metal Exchange traded copper futures rose just over one percent to $7,940/50 a ton, lifted by a potential strike in top producer Chile. Lead hit a record $2,940 in early trade.

Several investment banks updated their quarterly forecasts for metals prices, revising down gold. JP Morgan was now looking for gold to average $664 in 2007 and $716 in 2008 versus its previous estimates of $688 and $725 respectively.

Both institutions cited an acceleration of central bank sales as a bearish factor.

Silver rose to $12.74/12.78 an ounce from New York's $12.68/12.73 as the market tried to establish a firmer footing in the wake of June's heavy sell-off.

Platinum was backed by bullish fundamentals amid wariness over possible labour strikes in South Africa. Prices rose to their highest in a week at $1,294.50/1,298.50 an ounce, up from New York's $1,290/1,297.

—Reuters