BISINISS WORLD NEWS

NEW YORK: Gold rose to a one-month high and euro-priced gold hit a record peak, as currency uncertainties and worries over smaller euro-zone economies prompted safe-haven buying in the metal.

Palladium climbed to a two-year high, extending its gains above $500 an ounce, driven by strong investment demand due to an improving auto-sector outlook.

Bullion's gains in the face of a stronger dollar indicate the inverse relationship between the metal and the U.S. currency will occasionally break down, if risk-averse investors pile into gold due to related to economic jitters, traders said.

"People are still worried about the euro and the Greece situation, and gold is partially getting support from the economic recovery as people are looking to get ahead of the inflationary trade," said Zachary Oxman, managing director of TrendMax Futures.

Oil prices inched up toward $87 a barrel, rising for a sixth consecutive session, as recent positive economic data boosted futures to a fresh 18-month high.

Gold tends to track crude prices, as the metal can be bought as a hedge against oil-led inflation.

Spot gold was at $1,135.05 at 3:53 p.m. EDT, against $1,129.70 late in New York on Monday. It hit a session high $1,138.40 an ounce, its firmest since March 5.

U.S. June gold futures on the COMEX division of the NYMEX settled up $2.20 at $1,136 an ounce.

Bullion's strength in terms of euro also showed underlying currency concerns.

Euro-priced gold rose to a record 851.04 euros an ounce, against 837.68 late on Monday.

The euro declined broadly as reports that Greece wanted to amend a European Union aid deal rekindled fear about its ability to resolve its debt crisis.

Indian dealers said demand for the metal in the world's biggest gold market was firm as traders took advantage of a price retreat to stock up ahead of a raft of festivals and for the spring wedding season.

"With gold doing well on the crosses and with good physical demand in India and China, there is still a group who are looking at gold as a currency," said Simon Weeks, head of precious metals at the Bank of Nova Scotia.

Among other commodities, palladium also rose to two-year highs at $508.50 an ounce against $500, boosted by expectations demand will be strong this year from carmakers -- who account for more than half of palladium consumption -- and investors.

Platinum was at $1,699.50 an ounce against $1,703.

"We remain tactically bullish both metals this year, expecting their price increases to outstrip those for gold," said UBS analyst Edel Tully in a note.

The gold-platinum ratio which shows how many ounces of gold are needed to buy an ounce of platinum, reached 1.51 on Tuesday, a UK-based news agency data showed, matching the previous session's level, its highest since September 2008.

Among other precious metals, silver was at $17.95 an ounce against $18.02, as the market took a breather and tracked the decline of other industrial metals.