Gold jumped almost 6 percent to its highest in a month on Friday, buoyed by a weakening dollar and rising oil prices while other precious metals rallied, tracking bullion's gains. Spot gold rose to $789.55 an ounce, its highest since Oct. 21 and was at $786.05 an ounce by 1549 GMT, versus $745.10 an ounce in New York late on Thursday. “We're seeing a rally supported by the weakening dollar,” Suki Copper, analyst at Barclays Capital, said. The dollar fell as global stocks rebounded. Early in New York, the euro was up 0.9 percent at $1.2575 although it was off a $1.2640 session high. Gold tends to move in the opposite direction to the dollar, as a strong US currency makes bullion more expensive for local currency holders. “We have not seen a huge change in fundamentals. The World Gold Council report certainly supports from a demand perspective. We think on the back of strong jewelry demand the downside should be cushioned for gold prices,” Cooper said. The World Gold Council said investment demand rose 56 percent to 382.1 tons for the third quarter of this year as heightened levels of economic and financial uncertainty stirred safe-haven buying. The council said the global demand for gold was expected to be steady around 843 tons in the fourth quarter of 2008 on festive demand and buying by investors. But gold is still 25 percent below a lifetime high of $1,030.80 struck in March, which it has been unable to revisit after selling choked off recent rallies. It hit a two-month high of $931 in October but losses in equities forced investors to cash in to cover losses. Oil rallied from three-and-half-year lows on Friday, spurred partly by gains in global stock markets reflecting hopes that central banks around the world might cut interest rates, including China. US light crude for January delivery rose 23 cents to $49.65 a barrel at 1505 GMT. Earlier it fell to $48.25, its lowest in three and a half years. London Brent crude gained 69 cents to $48.77 a barrel. Platinum jumped more than 6 percent on bargain hunting, after falling to a three-week low of $759 an ounce in Asian trade as weak demand from the auto industry continued to weigh on prices.The metal, used mainly in autocatalysts to clean exhaust fumes, was trading at $797.50 an ounce, up from $762.50 an ounce in New York late on Thursday. Honda Motor said it would build fewer cars in Japan, Europe and North America to reflect an increasingly bleak outlook for sales.
