LONDON, June 19:Gold climbed to its highest level in more than a week on Thursday as the weakening dollar added impetus to investors buying the precious metal to protect their assets against inflation.

Gold hit $895.05 an ounce, its highest since June 9, and was at $888.10/889.10 an ounce from $890.75/891.95 late in New York on Wednesday, when it jumped nearly $7 on a falling dollar and higher oil prices.

The dollar is a supportive factor for gold ... Inflation concerns are still prominent, there will be some safe-haven buying, said Suki Cooper, analyst at Barclays Capital.

A lower US currency makes metals priced in dollars cheaper for holders of other currencies, while gold is seen as a store of value during times of inflation, which is threatening to turn into a spiral.

The dollar fell against the euro as the market scaled back its expectations of aggressive rate rises from the US Federal Reserve, given poor growth prospects and the crisis in the banking sector.

Gold prices have been able to rally recently in large part because the US Federal Reserve and European Central Bank softened their anti-inflation rhetoric, HSBC said in a note.

Gold hit a record of $1,030.80 on March 17 before a broad sell-off in commodities dragged down prices.

Oil steadied on Thursday, supported by a further production outage in Nigeria and as a top US investment bank raised its oil price forecast. US crude was down 37 cents to $136.31 a barrel.

Platinum was off intraday highs but underpinned by supply worries after South Africa’s power regulator approved an additional 13.3 per cent tariff rise for state-owned power firm Eskom on Wednesday.

Platinum we think has the strongest fundamentals within the precious metals complex, especially now as we’ve entered peak demand period for power in South Africa, Barclays Capital analyst Cooper said. Spot palladium rose to $464.00/472.00 an ounce from $466.00/474.00 on Wednesday.

Silver gained to $17.27/17.32 an ounce from $17.05/17.13.

—Reuters