Gold prices in New York rose, rebounding from the biggest decline in three weeks, as higher energy costs boosted the precious metal's appeal as a hedge against inflation.

Gold and crude oil have gained 22 percent this year. Oil rose today after Iran's president said the nation would complete its enrichment of uranium, sparking concern oil supplies from the fourth-largest crude producer would be interrupted. Gold reached $873 an ounce in 1980 when oil costs doubled in a year and consumer prices rose to 12 percent.

``It's the inflationary pressure from oil that's driving gold'' said Marty McNeill, a trader at R.F. Lafferty Inc. in New York.

Gold futures for August delivery rose $10.40, or 1.7 percent, to $636.50 an ounce at 11:47 a.m. on the Comex division of the New York Mercantile Exchange. Prices tumbled 1.4 percent yesterday, the biggest decline since June 19.

A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.

Oil prices have climbed this year partly on concern that exports from Iran and other Middle East producers may be disrupted should the dispute over nuclear research escalate. Iran's president said today the country won't back down ``one iota'' on its right to conduct atomic research.

Oil reached $74.60 a barrel today. Prices climbed to a record $75.78 on July 7. Gold rose to a 26-year high of $732 an ounce on May 12.

``Gold is pretty routinely following the crude market recently,'' said Daniel Vaught, a commodity analyst at A.G. Edwards & Sons Inc. in St. Louis.

Mumbai Train Blasts

Gold also gained on speculation a series of train explosions in Mumbai, India's commercial hub, may spur demand for the precious metal as a haven. India is the biggest purchaser of gold.

As many as 137 people were killed and 450 injured by seven bomb blasts along the city's suburban rail network. It was the worst terrorist attack in the city since 1993.

``It's more of a local issue,'' said Paul Walker, chief executive officer of London-based metals research firm GFMS Ltd. ``If it were to escalate, and there's an expectation that the rupee could fall, you could see some pre-emptive buying of gold.''

Gold may reach $700 by the end of the year, GFMS has said.

Silver futures for September gained 39 cents, or 3.5 percent, to $11.50 an ounce. Before today, prices had climbed 25 percent this year.