Gold rose back above $967 in Europe on Wednesday as fresh dollar weakness prompted buying of the precious metal as a currency hedge and as oil prices rose to a new seven-month high.
Silver, platinum and palladium all tracked gold up, with dollar-priced commodities benefiting from the US unit's slip, which makes them cheaper for holders of other currencies.
Spot gold was bid at $961.40 an ounce at 0854 GMT, against $953.75 an ounce late in New York on Tuesday.
"Some buying came back into gold and silver yesterday afternoon when the dollar weakened," said Alexander Zumpfe, a trader at precious metals house Heraeus.
"Additional support came from the stronger oil price, which is on levels not seen for several months."
The dollar slipped against a basket of currencies on Wednesday, extending the previous session's losses, as investors questioned whether the US economy was sufficiently recovered to justify talk of a Federal Reserve rate hike.
The US unit weakened to $1.41 versus the euro. Traders are awaiting the release of the Fed's Beige Book of regional economic conditions later in the session, which may offer fresh clues on the outlook for interest rates, for direction.
Oil meanwhile climbed 2 percent to a high of $71.65 a barrel, its firmest since early November, boosted by a larger than expected fall in crude stocks and a forecast that falling demand could be bottoming out.
Strength in crude prices is a key indicator of interest in commodities as an asset class and can fuel buying of gold as an inflation hedge.
"Oil and the weak US dollar are the driver again," said senior Commerzbank trader Michael Kempinski. "If we stay above $960, it looks much better on the technical side as well for gold, and we might try the upside again the next days."
Nonetheless soft physical demand for the precious metal could threaten the rise. Inflows into gold exchange-traded funds have largely bottomed out, with the largest, SPDR Gold Trust, reporting no change in its holdings.
"Physical demand remains weak and I think that metals look a bit toppish up here," said Zumpfe at Heraeus.
Meanwhile European equities opened higher, with energy companies leading on strength in crude prices and banks gaining. Shares rose in Asia as reports of above-consensus Chinese industrial output cheered investors.
Among other precious metals, silver firmed to $15.36 an ounce against $15.21. Platinum was at $1,266.50 an ounce against $1,247, while palladium was at $256 against $252.50.
Investment interest in platinum remained buoyant. ETF Securities reported a fresh 11,000-ounce inflow into its ETFS Physical Platinum fund on Tuesday, meaning its holdings are now up 15 percent week-on-week. -
