London: Gold climbed 4 per cent yesterday to a 10-day high above $800 an ounce as oil prices rallied ahead of US stockpiles data, and on dollar weakness against the euro.
Strength in the industrial metals and firmer equity markets also cheered buyers, as US stocks rose at the open and European shares edged higher.
Spot gold rose to a session high of $807.70 an ounce, and was quoted at $805.50/$807.50 an ounce at 1433 GMT, up from $775.50 an ounce in New York late on Tuesday.
In sterling terms it rose to £545.63, only 1 per cent from the high of 550.82 pounds it reached in October.
US gold for February delivery was up $32.20 an ounce at $806.40 on the Comex division of the New York Mercantile Exchange. It reached a high of $808.70 in earlier trade, its firmest since December 1.
Citi analyst David Thurtell said gold's rise had been fuelled by technical factors, as key stops were triggered below $800 an ounce. "There is a little dollar weakness and oil jumped...so that is giving it a hand," he added.
Rising crude prices, which can boost interest in commodities as an asset class and in gold as a hedge against oil-led inflation, have supported the precious metal.
Oil jumped more than 5 per cent to over $44 a barrel. Traders are looking ahead to US stocks data later in the session and next week's meeting of oil group Opec, where production cuts will be discussed.
"There is speculation that further Opec oil production cuts could lift prices," Fairfax analyst John Meyer said.
The dollar slipped to a two-week low against the euro as a tentative US plan to bail out carmakers relieved some risk aversion, which had benefited the US currency. Traders sold the dollar and low-yielding yen as market volatility calmed.
Traders are also eyeing the equity markets, which provided strong direction to gold on Tuesday. US stocks rose at the open as news of a tentative agreement to provide aid to US automakers calmed investor fears.
