LONDON, Sept 1: Gold rose to $832.00/834.70 an ounce from $830.35/832.35 an ounce on Monday in London.

You have two opposing forces, said analyst Robin Bhar at Calyon said. Gold will track the oil price almost a dollar for dollar but will also be capped by the strength in dollar, he said.

Gulf shut down nearly all offshore oil output and a host of flood-prone coastal refineries ahead of Hurricane Gustav, the biggest threat since 2005’s devastating Katrina.

Higher oil prices boost gold’s appeal as a hedge against the inflation while a stronger US dollar makes it more expensive for local currency holders.

The dollar index crept towards an eight-month high while the US currency rose against sterling to its highest level in more than two years.

This is just a broad consolidation of gold. There’s resistance around $840-850 an ounce. It will struggle to make much headway, he said.

Spot platinum fell as low as $1,418.50 an ounce, down from $1,474.50/1,494.50 in New York, with technical selling. The metal was last at $1,441/1,461.

I think the demand is slow right now. There are still worries about the global economy, that’s why they don’t want to buy too much for the being, said Dick Poon, manager of precious metals at Heraeus Ltd. in Hong Kong.

The bulk of the world’s platinum is used by automakers in autocatalyst systems that scrub exhaust fumes of dangerous and environmentally damaging chemicals.

Analysts say jewellery demand has helped gold to rally back from its nine-month lows of around $773 an ounce in mid-August, but the yellow metal still trades way below its all-time high of $1,030.80 an ounce, hit in March.

The first two weeks of August saw 60,000 gold coins sold in the US The US mint describes the activity as unprecedented as new retail investors enter the market, said Meridian Fund Managers in a research note.

India’s festival season begins next week and should provide strong support to the price of the commodity throughout the fall, it said.

Spot palladium eased to $300/308 an ounce from $303.00/341.00 an ounce. Silver firmed to $13.67/13.72 an ounce from $13.58/13.68 an ounce late in New York.—Reuters