Gold extends gains as dollar loses ground

London: Gold extended gains to rise nearly 3 per cent yesterday as the dollar lost ground against the euro, boosting the precious metal's appeal as a currency hedge.

Gold and platinum prices traded within $5 of one another, threatening to breach parity for the first time in 12 years, as platinum remained rangebound ahead of a decision on a $14 billion plan to bail out US carmakers.

Platinum, which is mainly used as a component in catalytic converters, is particularly vulnerable to a downturn in the auto sector.

Spot gold hit a high of $833.80 an ounce and was quoted at $826.50/$828.50 an ounce at 1347 GMT, up from $809.90 in New York late on Wednesday.