LONDON, Nov 20: Gold prices rose on Thursday, buoyed by interest from jewellery makers and investors seeking safety, but a stronger dollar and lower oil prices are expected to weigh on sentiment.

Spot gold was higher at $743.30/745.30 an ounce from $732.40 in New York late on Wednesday when it touched $762.30 an ounce, its highest in more than a week.

Data from the World Gold Council showing an 18 per cent jump in demand for gold to 1,334.4 tons and a 56 per cent rise in investment demand to 382.1 tons in the third quarter has helped sentiment.

Gold is used as a hedge against turmoil in financial markets -- equity prices in Europe and the United States are trading at their lowest levels in more than five years.

There is a risk recession could dampen jewellery demand. Fears of rising inflationary pressures, crisis in credit markets and the dollar's collapse earlier this year pushed gold prices to a record $1,030.80 an ounce in March.

Deflationary impulses in the economy, according to monetary theory, are negative for gold prices, as they increase the purchasing power of currencies and reduce the need to own gold as an inflation hedge, HSBC said in a note.

The inability of oil to rally is another sign of deflation. Crude oil prices have tumbled by more than 60 per cent to about $53 a barrel since a record above $147 a barrel in July on fears of collapsing growth and demand.

Growth fears have also hit platinum used to make auto catalysts that clean car emissions. Platinum prices have plunged from $2,290 an ounce in March.

News of falling car sales and a rapidly deteriorating outlook for the auto sector accelerated the sell-off.

Doubts about whether a $25 billion rescue plan to bail out US auto makers will be passed could further damage sentiment.

It doesn't look as if it's going to happen, a London-based trader said. But they've got two days. Platinum was at $804/824 an ounce from $808.50 late on Wednesday and silver at $9.35/9.43 from $9.24.

Palladium jumped more than 6 per cent to $192 an ounce on bargain hunting. It was last at $181 from $180.50.—Reuters