LONDON, April 7: Gold rose more than 1 per cent on Monday as firm oil prices and positive market sentiment prompted investment in the metal, a traditional hedge against inflation.Silver tracked gold, while platinum rose on persistent worries about output in main producer South Africa, which accounts for 80 per cent of the world’s supply.

Gold rose as high as $918.70 an ounce and was quoted at $917.60/918.50 at 1033 GMT, against $908.40/909.20 late in New York on Friday. But the metal is still 10 per cent below a record high of $1,030.80 hit on March 17.

Gold is reacting to a rise in oil prices and the dollar is on a weak footing. The gold market is not as long as it could be given the recent precipitous decline in the COMEX net speculative long position to 19.3 million ounces, said David Holmes, director of metals sales at Dresdner Kleinwort.

Gold often moves in the opposite direction of the dollar.

The gold market has also been witnessing buying from jewellers at price dips, helping the metal rebound from a two-month low of $872.90 an ounce touched last week.

Gold prices remain reasonably stable, with jewellers buying on price dips, Fairfax investment bank said in a report.

The bullion market will keep an eye on the International Monetary Fund’s meeting on Monday to consider revamping the institution’s more than 60-year-old income model and raise money through the sale of a limited portion of IMF gold stocks.

The IMF holds 103.4 million ounces of gold. As of February 20, they were worth $95.2 billion. A panel led by Andrew Crockett, president of JP Morgan Chase, has recommended the sale of about 12.9 million ounces, or 400 tons, of the gold to close a projected income gap of $400 million by 2010.

The IMF board cannot take a decision on Monday to begin the sale until the United States Congress has approved the move.

Silver rose to $17.94/17.99 from $17.77/17.82 an ounce. Spot palladium rose to $452/458 an ounce from $436/440 an ounce in New York.—Reuters