April 29, 2008	Tuesday	Rabi-us-Sani 22, 1429

LONDON, April 28: Gold rose on Monday as oil roared to a record high near $120 a barrel, but investors were cautious ahead of this week’s meeting of the US Federal Reserve on interest rates.

Bullion rose as high as $894.25 an ounce and was quoted at $892.40/893.10 at 1014 GMT, against $886.90/888.30 in New York late on Friday.

I do expect gold to drift around $900 for a little while, until we really see another strong shift in sentiment. Even the spike in oil is failing to really fire up the gold market, said Daniel Hynes, metals strategist at Merrill Lynch.

After such a good run, a lot of people took the opportunity to liquidate, but the general trend would be for rising prices in the medium- to long-term,he said.

Gold got support from strong oil and a weaker dollar, but analysts said bullion’s upward movement was not as impressive as it was last month when historic high oil and a record low dollar propelled gold to a lifetime high of $1,030.80 on March 17.

The metal has fallen 13 per cent since then and has been struggling to regain $900. It hit a three-week low of $877.60 on Friday before rising after oil surged, lifting gold’s appeal as a hedge against inflation.

Investors are awaiting the outcome of the US Fed’s decision concerning possible interest rate cuts, Fairfax investment bank said in a report.

Oil prices leapt to a record high near $120 a barrel after workers pushed ahead with a two-day strike that shut a major North Sea oil pipeline supplying about half of Britain’s oil.

Fresh violence in Nigeria and simmering tensions between the United States and major oil exporter Iran also helped.

Gold futures for June delivery on the COMEX division of the New York Mercantile Exchange rose $5.30 an ounce to $895.00 an ounce in electronic trading.

In other metals, platinum rose to $1,965/1,980 an ounce from $1,944/1,964 late on Friday, silver gained to $16.95/17.00 an ounce from $16.83/16.89 and spot palladium was up $1.50 at $437/445 an ounce.—Reuters