LONDON, June 30: Gold climbed on Monday as the dollar slipped to a one-month low against a basket of currencies and as oil reached a record high, fuelling buying of the precious metal as an inflation hedge.

Gold was at $932.50/933.50 an ounce at 0948 GMT, up from $927.20/928.20 an ounce late in New York on Friday. Earlier it touched a session high of $934.55 an ounce, its firmest level since May 22.

The dollar looks pretty weak, and financial risk is rising, said Standard Bank analyst Walter de Wet.

Equities doing so badly over the last week has been good for commodities in general, and in terms of credit, default spreads have been rising, he added. That supports gold.

We will probably see gold closing higher today than it did in the last session, he said.

The dollar, which wilted last week after the US Federal Reserve adopted a less hawkish tone than expected on interest rates, slid to a one-month low on Monday, battered by weak equities, strong oil and weak US consumer confidence.

A softer dollar tends to benefit gold, which is often bought as a hedge against weakness in the US currency.

A weaker greenback makes dollar-priced commodities cheaper for holders of other currencies.

The other main external driver of gold, oil, also supported gold, as it hit a new record of $142.94 a barrel on rising tension between Iran and Israel and as the dollar softened.

Rising crude prices boost gold’s appeal as a hedge against oil-led inflation, as well as fuelling investment interest in commodities in general.

Investor sentiment towards gold remains positive, with the quantity of the precious metal held by SPDR Gold Trust the world’s largest bullion-backed exchange-traded fund, rising by 2.5 per cent on Friday.

Among other precious metals, spot platinum rose to $2,064.00/2,084.00 an ounce from $2,053.50/2,073.50 late in New York.

Silver rose to $17.77/17.82 an ounce from $17.52/17.61 late in New York.

The largest silver ETF listed in New York, the iShares Silver Trust said its holdings edged up to 6,002.41 tons on June 26 from 5,971.63 tons.—Reuters