Gold above $900 on record oil, hits 2-week high

By Lewa Pardomuan

SINGAPORE (Reuters) - 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 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 level 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 82 cents to $137.72 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.

Record high oil and uncertainties in the dollar outlook pushed up gold to a record high of $1,030.80 in mid-March.

"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.