UPDATE 5-Gold rises as dollar weakens, commodities recover

* European governments act together to boost liquidity

* Dollar weakens as euro bounces * Oil, base metals, other commodities trade recover (Recasts, updates throughout, changes dateline, pvs SINGAPORE) By Jan Harvey

LONDON, Oct 13 (Reuters) - Gold rose in Europe on Monday as the dollar weakened, boosting the precious metal's appeal as an alternative investment, and as oil prices climbed.

Commodities recovered almost across the board after Friday's market rout, with crude futures, industrial metals, sugar, grains and coffee all rising.

Spot gold <XAU=> was at $862.25/865.25 an ounce at 0911 GMT, up from $847.40 in late New York trade on Friday. The metal swung in a range of more than $100 that session as turmoil on the financial markets spooked investors.

"Gold at this level is attractive, and we are looking for higher prices -- towards $900," said Commerzbank analyst Eugen Weinberg.

Gold was supported by a slip in the dollar versus the euro, usually a key external driver of bullion prices. The euro rallied broadly after European governments said they would work together to stabilise the banking sector. [ID:nLD148610]

"(A) correction in the dollar, coupled with the wide credit spreads, should bode well for precious metals today," said Standard Bank analyst Manqoba Madinane.

Analysts will be watching developments on other financial markets closely, both for their influence on the dollar and on demand for gold as a haven from risk.  Continued...