(Recasts, adds quotes, changes prices, pvs SINGAPORE)
By Atul Prakash
LONDON, April 15 (Reuters) - Gold gained more than 1 percent
on Tuesday as record high oil prices and a weaker dollar
encouraged investors to put money into precious metals.
The metal <XAU=>, seen as a hedge against oil-led inflation
and an alternative investment to the U.S. currency, climbed to a
high of $935.65 an ounce and was quoted at $932.90/933.90 at
1001 GMT, against $925.30/926.10 late in New York on Monday.
"Gold has gained on the back of a weaker dollar. We are now
seeing some acceleration in the buying interest on expectations
that gold could shift higher from here," said Frederic
Panizzutti, metals analyst at MKS Finance.
"We expect the next target to be around $950. Still, it
might take a bit of time to reach that level. The market remains
shy after the recent price correction," he added.
Gold slipped to a two-month low of $872.90 an ounce in early
April after hitting a record high of $1,030.80 on March 17 in a
broad commodities sell-off, triggered by a rise in the dollar
and some weakness in oil prices.
Oil advanced to all-time peaks on Tuesday, as investors
sought to hedge against a battered dollar. It is up 17 percent
from the start of the year and is averaging near $100 a barrel.
The bullion market was getting support from the dollar,
which held within half a cent of record lows versus the euro in
generally cautious trading ahead of U.S. economic data and
first-quarter results from corporate heavyweights this week.
The dollar has come under pressure due to a sluggish U.S.
economy -- which some think is already in recession -- and 3
percentage points in rate cuts since September. The U.S. Federal
Reserve is expected to cut the rate again later this month from
the current 2.25 percent.
A weaker dollar makes gold cheaper for holders of other
currencies and often lifts bullion demand.
TECHNICAL RESISTANCE
"Pressure on the greenback this morning has lifted gold and
given the likelihood for further dollar downside movements and
gains in the energy sector, we could well see gold make a move
higher in the coming sessions," said James Moore, analyst at
TheBullionDesk.com.
"Gold still has to overcome strong technical resistance but
given the ongoing recessionary/inflationary fears and liquidity
issues dogging the credit market, we remain bullish in the mid-
to longer-term and expect gold to reclaim $1,000 later in the
year," he said in a market report.
Investors awaited U.S. producer price index for March, due
later on Tuesday, and the U.S. March consumer price index on
Wednesday for the dollar's direction, which may affect gold.
The market will also scrutinise results from Merrill Lynch
<MER.N> and Citigroup <C.N>, due later in the week. Analysts
expect both to announce billions of dollars in bad debt
write-downs.
In the physical sector, purchases from India, the world's
largest gold consumer, kept the physical market alive during the
wedding season, but wild swings in bullion prices crimped demand
in other parts of Asia. []
In other markets, U.S. gold futures for June delivery <GCM8>
rose $5.80 an ounce to $934.60 an ounce in electronic trading.
Spot platinum <XPT=> rose to a high of $2,000 an ounce and
was last quoted at $1,990/2,000, against $1,958/1,968 in New
York. Silver <XAG=> was up 3 cents at $17.81/17.86 an ounce, but
palladium <XPD=> fell $1 to $458/463 an ounce.
(Additional reporting by Alastair Sharp in London; editing
by Chris Johnson)
