Gold hits record highs near $1,120


London - Gold hit record highs near $1,120 an ounce on Wednesday as a dollar index fell to 15-month lows, with expectations that a U.S. economic recovery will be erratic seen keeping American interest rates low for a while.

The metal is now poised for more gains, analysts said, with the weak dollar helping gold build on a rally that began last week after the IMF sold 200 tonnes of bullion to India's central bank, raising the prospect of more official sector buying.

Oil prices rose to near $80 a barrel as the effects of a weaker U.S. dollar trumped a report pointing to a rise in U.S. oil inventories.

Spot gold hit a high of $1,117.05 an ounce and was at $1,114.80 at 1154 GMT versus $1,105.30 late on Tuesday.

U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $12.70 to $1,115.20 an ounce.

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Among other precious metals.

Spot Silver was bid at $17.59 an ounce against $17.32, tracking gold higher.

Platinum was at $1,365 an ounce against $1,349.50.

Palladium was at $336.65 against $331.50.

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Oil rises to near $80 as the dollar weakens

Oil prices rose to near $80 a barrel Wednesday as the effects of a weaker dollar trumped a report pointing to a rise in U.S. oil inventories.

By early afternoon in Europe, benchmark crude for December delivery was up 58 cents to $79.63 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 38 cents to settle at $79.05 on Tuesday.

Analysts said changes in the price of oil were tied to how global stock markets were doing and the dollar's fluctuating exchange rate.

"This has nothing do to with any oil supply and demand fundamentals," said Olivier Jakob of Petromatrix in Switzerland.

Late Tuesday, a survey from the American Petroleum Institute showed a rise in U.S. oil inventories last week. Crude stocks increased 1.2 million barrels while analysts had expected a rise of 1.0 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

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24 Hour Base Metals

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Gold & PGM Prices

Nov 11 2009 11:22AM NY Time dd Change Gold 1113.80 +0.72% Platinum 1362.00 +0.89% Palladium 342.00 +3.64% Rhodium 1892.50 +0.00%