Gold prices rose to a five-week high in New York as the escalating dispute over Iran's nuclear research program and terrorist attacks in India spurred demand for precious metals as a haven. Silver surged 4.1 percent.

Gold reached a 26-year high of $732 an ounce on May 12 partly on concern Middle East oil exports might be disrupted should the U.S. move to block Iran's nuclear program. Iran's president today said the country won't back down ``one iota.'' As many as 137 people were killed in Mumbai, India's commercial hub, by seven blasts on trains and in commuter stations.

``Traders are looking to put money back into metals on geopolitical concerns,'' said John Licata, chief investment strategist for Blue Phoenix Inc., a precious-metals and energy firm in New York. ``Silver has been oversold in relation to other precious metals, and momentum traders are jumping back in.''

Gold futures for August delivery rose $16.90, or 2.7 percent, to $643 an ounce on the Comex division of the New York Mercantile Exchange. Prices earlier reached $643.90, the highest since June 6.

Silver for immediate delivery jumped 45.5 cents to $11.545 at 1:53 p.m. New York time. The percentage gain was the biggest fluctuation of any commodity today. The metal has climbed 31 percent this year.

Gold rose as higher energy costs boosted the appeal of precious metals as a hedge against inflation. The precious metal is up 24 percent this year, and crude oil has gained 22 percent. Gold reached $873 an ounce in 1980 when oil costs doubled in a year and consumer prices rose to 12 percent.

`Inflationary Pressure'

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

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.

As many as 450 were injured in Mumbai. It was the worst terrorist attack in the city since 1993. The Lashkar-e-Taiba group, which seeks an end to Indian control of Jammu & Kashmir state, claimed responsibility, according to the CNN-IBN television channel. India put all its major cities on alert. The country is the biggest buyer of gold.

``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.

Base Metals Climb

Silver, which has some industrial uses, also benefited from higher base-metal prices, some analysts said. Nickel in London rose for the 10th straight session, extending gains to at least a 19-year high. Copper rose to a one-month high.

Silver reached a 25-year high of $15.20 an ounce on May 11.

Silver's move is ``related to other markets,'' said Michael Guido, director of hedge fund marketing and commodity strategy at Societe Generale in New York. ``It's running on the back of gold and base metals. People who are looking for the big pullback in silver got it, and now a base is forming. You're seeing fresh investor interest.''

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