Singapore - Gold rose for a fourth straight day on Thursday, rising 2% at one point, as oil extended gains and the dollar fell against the euro, which stirred hopes bullion could eventually regain $800 on safe-haven buying.
Other precious metals tracked gold higher, with firmer equities also helping prices move away from their multi-year lows. The US Federal Reserve cut interest rates by half a percentage point on Wednesday, sending the US dollar tumbling.
Gold was trading at $763.30 an ounce, up $9 an ounce from New York's notional close on Wednesday, when it hit an intraday high of $773.40 an ounce.
"I think all the preconditions are there for gold to take a very healthy run. The physical demand for gold has actually exceeded the ability to supply right around the world," Ian Smith, managing director of Newcrest Mining Ltd, told reporters in Melbourne.
Newcrest is Australia's largest gold producer.
Gold plummeted to its weakest in 13 months at $680.80 on Friday after investors cashed in to cover losses in stock markets. It has bounced on strong oil, a recovery in equities, a firmer euro and tightness in physical gold supply after a recent drop in prices triggered buying from jewellers and investors.
"My view is that we're likely to see the gold price continue to move higher in the near term," said David Moore, commodities analyst at Commonwealth Bank of Australia in Sydney.
"I mean it'll probably follow a fairly uneven path but the underlying trend is for gold to be back above $800 an ounce by the end of this year," he said.
Gold, which traded around $800 earlier this month, was still below a record high of $1 030.80 hit in March after a rally to a two-month high of $931 on October 10 was met by heavy selling.
Oil rose more than $2 to above $69.50 barrel due to the dollar weakness after the Fed cut interest rates, which in theory boosts gold's appeal as a hedge against inflation.
The euro rose against the dollar, recovering from a 2-1/2-year low hit this week, as the oil rally spurred investors to pick up currencies battered during a rapid slide in recent months from record highs near $150 in mid-July.
"The dollar seems to be on the downside and that helps gold. But I would say gold will still be trading in a very wide range of $700 to $800 an ounce," said a dealer in Hong Kong.
Japan's Nikkei average climbed more than 6% on bargain hunting .
Two of the world's leading gold miners reported big drops in quarterly earnings on Wednesday as soaring costs for fuel and raw materials ate into margins already narrowed by a slumping gold price.
Platinum was trading at $821.50 ounce, up $28.00 from New York's notional close.
New York gold futures added $9.9 an ounce to $763.9.
- Reuters