Gold: Hedge Against Inflation

Gold continued picking up on Tuesday, adding nearly 2 percent in New York, helped by bargain hunting and unbelievably-high crude oil, which enhanced the metal's appeal as a hedge against inflation.

Bullion's fall to a four-month low last week also spurred buying from the physical sector, especially in main consumer India ahead of a religious festival. But gold was still trading well below a record of $1,030.80 an ounce hit on March 17.

Gold edged up to $873.70/874.70 an ounce from $871.15/872.55 late in New York on Monday, moving some way above Friday's four-month low of $845 an ounce.

Gold's gains offered support to silver, platinum and palladium.

India celebrates Akshaya Tritiya on Wednesday and Thursday -- a festival when many Hindus buy precious metals with the belief it will give them lasting prosperity.

Dealers also reported buying interest from jewelers and bargain hunters in the Middle East, Indonesia and Thailand.

Crude oil CLc1 was steady on Tuesday, extending a rally that saw prices jump to another record above $120 a barrel on a weaker U.S. dollar, geopolitical tensions and supply concerns.

Gold futures for June delivery GCM8 on the COMEX division of the New York Mercantile Exchange added $1.2 an ounce to $875.3 an ounce.

Tokyo precious metal markets were closed for a holiday.

Gold held in StreetTRACKS Gold Shares, the world's largest gold-backed exchange-traded fund XAUEXT-NYS-TT, was unchanged at 580.45 metric tons but down from a record of 663.83 metric tons in mid-March.