By Lewa Pardomuan SINGAPORE (Reuters) - Gold edged up in volatile trade on Friday, recovering from a 6-percent drop in New York, after oil rose more than $3 and a rebound in equities eased worries of a global recession, at least for now. A fall in the dollar against the euro restored gold's safe-haven appeal after a recent sell-off in equities drove speculators to sell bullion to cover losses. Firmer gold plucked other precious metals from their multi-year lows. Gold was trading at $807.25 an ounce, up $2.75 from New York's notional close, having hit an intraday low of $795.25, not far from a 1-month low of $783.80 hit on Thursday when funds dumped commodities amid uncertainties in the financial markets. "Obviously, the price action is telling you that there are sellers. One of the factors causing gold to be sold is people are selling gold in order to get cash, the U.S. dollar," said David Moore, commodities analyst at Commonwealth Bank of Australia. "But I think they still create interest in gold as a safe-have investment as well. It's just a number different forces play on the gold market at the moment." Gold's volatility has scared off jewelers and some investors. It rallied to a two-month high of $931 last Friday on a weak dollar before tumbling all the way to $823.50 on the same day as investors sought cash to cover margin calls. Gold was well below a record of $1,030.80 hit in March. Bargain hunting by private investors in Japan and buybacks by producers lifted gold prices, but jewelers were on the sidelines and the charts also indicated bullion could still hit the lows again, said Yukuji Sonoda, an analyst at Daiichi Commodities. "In Japan, jewelry demand is tremendously poor. So many scraps have been returned to fabricators. We reached $750 last month, so it may be possible for us to touch that level again," he said. In other markets, Japan's Nikkei average .N225 pared gains to 1.7 percent after an early rebound on Friday, which helped oil rise more than $3 after hitting a 15-month low. The dollar slipped against the euro as safety buying of the currency eased, with fears over the global financial sector slightly curbed. "I am bullish on gold because, in the end, as the global economic recession deepens, governments will find the only way out of this mess is to print more money," said Jeffrey Nichols, managing director of American Precious Metals Advisors. "In other words, to inflate. But a deeper downturn means that policy makers will need even more aggressive monetary easing and fiscal spending to breathe life back into the sick economy -- and governments will be even deeper in the hole." Government steps to shore up the banking system and unfreeze credit markets showed some signs of progress on Thursday, but grim news from major economies reinforced fears of recession and hammered global markets. Platinum was steady at $885.00 ounce, up $0.06 an ounce from New York's notional close on a technical rebound. It had plummeted to $831.50, it weakest since December 2004, on fears of a global recession. New York gold futures rose $4.7 ounce to $809.2. Precious metals prices at 1:47 a.m. Metal Last Change Pct chg YTD pct chg Turnover Spot Gold 807.25 2.75 +0.34 -3.06 Spot Silver 9.71 0.08 +0.83 -34.26 Spot Platinum 885.00 0.50 +0.06 -41.78 Spot Palladium 173.00 2.00 +1.17 -52.99 TOCOM Gold 2628.00 -62.00 -2.30 -14.12 35793 TOCOM Platinum 2880.00 -70.00 -2.37 -46.06 13815 TOCOM Silver 313.70 -2.80 -0.88 -42.01 703 TOCOM Palladium 586.00 -29.00 -4.72 -56.62 391 Euro/Dollar 1.3464 Dollar/Yen 101.54 TOCOM prices in yen per gram, except TOCOM silver which is priced in yen per 10 grams. Spot prices in $ per ounce.

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