Gold hits 1-week high on soft dollar and surging oil

By Lewa Pardomuan

SINGAPORE (Reuters) - Gold jumped to a one-week high on Thursday as speculative buying picked up on a falling U.S. dollar and surging crude oil, heightening the metal's appeal as a hedge against inflation.

Gold hit a high of $954.50 an ounce before slipping to $945.60/946.40 an ounce, down from $949.00/949.80 an ounce late in New York on Wednesday. It was still below a lifetime high of $1,030.80 touched on March 17.

Platinum and silver hit their loftiest level in more than a week to track gains in gold, while palladium matched a near one-week high struck on Wednesday.

"Looking ahead, we should be able to try $965. We are now back above positive territory, technicals-wise," said William Kwan, a dealer at Phillip Futures in Singapore.

"Platinum is already above $2,000, so right now buying interest is flowing back because of a better technical picture and definitely the weak dollar."

Gold has gained more than 20 percent in 2008 on speculative buying driven by record high oil prices that raised fears of inflation, and expectations of further interest rate cuts in the United States, which reduced the dollar's appeal.

Some dealers said investors' confidence was gradually restored after last week's broad-based sell-off in commodities knocked down gold prices to a one-month low of around $904 an ounce.

"There's a lot of interest from private investors to purchase gold around $920, and they have bought it. This is what has given the gold price a support," said Kwan of Phillip Futures. "There's less uncertainty."