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London: Gold jumped to its highest level in three weeks above $900 an ounce on Friday after oil struck another record and the dollar dropped against the euro.
Platinum also rallied ahead of the release of a report on the supply and demand outlook from refiner Johnson Matthey.
Spot gold hit a high of $904.30 an ounce, up from $881.55/$882.75 late in New York on Thursday, but was still well below a lifetime high of $1,030.80 an ounce hit on March 17.
"Our one-month target has been $920," said Suki Cooper, precious metals analyst at Barclays Capital.
"We see prices trading in consolidation mode with an upside bias. It's questionable whether prices currently have the momentum to make a sustained move higher."
The most active June gold futures contract on the COMEX division of the New York Mercantile Exchange added $22.9 to $902.9 an ounce.
"It is up on the back of the euro/dollar and weak consumer sentiment," analyst Michael Widmer at Lehman Brothers said.
"If we stay above $900 at the Friday close, that would give some support for gold."
Oil shot to a record high near $128 yesterday after Goldman Sachs, the most active investment bank in energy markets, sharply raised its forecasts for prices.
Spot platinum jumped to $2,132.50/$2,152.50 from $2,079/$2,094 an ounce late in New York.
The metal gained more than two per cent on speculation precious metals refiner Johnson Matthey may release another bullish outlook in its annual report on platinum group metals next week. "I think the underlying fundamentals for platinum are very strong," said Cooper of Barclays Capital.
"We're likely to see another large deficit in the market this year, given the expectations for reduced supply on the back of the power problems in South Africa."
Platinum, used in jewellery and auto catalysts, powered to record high of $,2,290 an ounce on March 4 after a power crisis in main producer South Africa disrupted mining and sparked fear of a supply deficit.
Gold hedging positions of mining companies fell 18 per cent to 22 million ounces in the first quarter of 2008, a report sponsored by Fortis Bank said on Friday, forecasting a full-year drop of 10-12 million ounces.
Silver edged up to $16.97/$17.02 an ounce from $16.70/$16.76 in New York.
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