Gold rose to its highest level in almost two weeks on Monday, moving back above $900 as speculative buying picked up after oil hit a record high, lifting the metal's appeal as a hedge against inflation. Platinum also jumped to its highest in nearly two weeks on persistent worries about supplies in main producer South Africa. Palladium was firmer, while silver struggled to sustain early gains. Gold rose as high as $904.10 an ounce, its highest since May 28, up from $896.80/898.20 late in New York on Friday and off a three-week low of $864.45 on Thursday. "It looks like we could head higher.
Gold remains on a steady 1-month uptrend. Thursday's reversal off the supports indicated that we could see higher gold prices," said Adrian Koh, an analyst at Philip Futures in Singapore. "Nearby uptrend support will probably be around $880." Oil fell 94 cents to $137.60 a barrel on Monday, having hit a record $139.12 on Friday amid frenetic buying triggered by a tumbling dollar and comments by an Israeli minister about a possible attack on Iran. A weaker dollar helped gold as it boosted the metal's appeal as an alternative investment to stocks and bonds. The euro was barely changed at $1.5770 after edging up to $1.5800 on trading platform EBS. "I'm more concerned about the dollar and the euro as we seem to be nearing key technical regions.
So a move over those levels could just spark another rally in gold," said Philip's Koh. Gold futures for June delivery on the COMEX division of the New York Mercantile Exchange added $6.2 an ounce to $905.2. The most active platinum contract for April 2009 delivery on the Tokyo Commodity Exchange ended the morning session up 100 yen per gram at 6,900 yen. Spot platinum rose to $2,068.50/2,088.50 an ounce from $2,064.00/2,084.00, having earlier hit a high of $2,080 -- its best since May 28. Mines in South Africa, including the world's biggest platinum and key gold mines, were forced to halt output for FIVE days in January due to electricity shortages and are still not receiving full power.