As rising oil prices boosted its appeal as a hedge against inflation, gold rose more than 2 percent on Tuesday
As rising oil prices boosted its appeal as a hedge against inflation, gold rose more than 2 percent on Tuesday, but a rally in stock markets could also cap gains.
Not to be outdone, platinum rallied 5 percent to track gold, with gains in Tokyo futures offering extra incentives for speculators to buy the metal, which is mainly used in autocatalysts.
Gold was trading at $847.70 an ounce, up $16.90 from the New York notional close, having hit an intraday high of
$849.35 an ounce. It had dropped to $821 an ounce on Monday, its weakest since Oct. 3.
"There's good TOCOM-related buying. I mean the Japanese come back after a holiday and they just want to buy something," said a dealer in Hong Kong.
"I think $920 is still the upside resistance for gold. It's hard to tell where the market is heading. It's going to be choppy and erratic again," he said.
Gold, which struck a record at $1,030.80 in March, traded around $920 in late September.
U.S. crude oil futures rose further on Tuesday, up along with Asian markets that rallied after a concerted effort by governments to shore up the banking sector gave hope the current financial crisis may ease.
Platinum was trading at $1,035.00 ounce, up $56.50 from New York's notional close. Platinum was well below a record high of $2,290 struck in March.
The most active platinum futures on the Tokyo Commodity Exchange rose 198 yen per gram as speculators returned to the market after a long weekend holiday.
New York gold futures rose $8.6 an ounce to $851.1 an ounce on safe-haven buying.