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London: Gold jumped more than two per cent to a one-week high in late business yesterday, as bullion buying gathered pace after oil climbed and the dollar pared gains.
But the metal, traditionally seen as a hedge against oil-led inflation and an alternative investment to currencies, was seen trading in a range in the near term after sharply falling from a record high of $1,030.80 an ounce hit on March 17.
"The dollar has moved down since this afternoon and that has put an upward pressure on gold prices. At the same time, oil prices are also higher and supporting the market," said Michael Widmer, metals analyst at Lehman Brothers.
"Most of the fundamental drivers are still in place, but we see a phase of consolidation. We had gone up above $1,000 at a quite rapid pace so it's hard to be as bullish in the short term as we were a month ago."
Gold rose as high as $927.70 an ounce and was quoted at $927.40/$928.30 at 1501 GMT, against $908.40/$909.20 late in New York on Friday. But the metal is still 10 per cent below its record high.
In other bullion markets, US gold futures for June delivery rose $18 an ounce to $931.20 an ounce.
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