Gold rose for a seventh consecutive day as investors bought the metal as a hedge after the U.S. dollar weakened and crude oil prices rose.

Some investors buy bullion to hedge against inflation, which this year has been stoked by record oil prices. Gold is also more attractive as an investment when the dollar declines. The currency fell close to a three-week low against the yen and the euro on concern U.S. economic growth may be slowing.

``The U.S. dollar has potentially further downside,'' said David Baker, a partner at Baker Steel Capital Managers LLP in London, which manages $600 million in gold and other natural resources. ``Higher oil prices have positive implications for the gold price.''

Gold for immediate delivery in London rose $3.11, or 0.5 percent, to $649.92 an ounce 11:03 a.m. in London. Gold futures for delivery in December rose $2.70, or 0.4 percent, to $661.50 an ounce on the Comex division of the New York Mercantile Exchange.

Oil-producing countries have a ``high affinity for gold and may convert some holdings to gold from U.S. dollars'' as energy earnings soar, Baker said. Gold may reach $750 an ounce by the end of 2006, he said.

Oil futures on the New York Mercantile Exchange rose 33 cents, or 0.4 percent, to $75.24 a barrel. They traded at a record $78.40 on July 14.

The U.S. Federal Reserve's preferred gauge of inflation rose 2.4 percent in June, the highest measure since April 1995, a report showed yesterday.

Rising Inflation

``Rising inflation in U.S. and surging oil prices are ideal situations for gold,'' Bharath K. Rekapalli, assistant vice president at Angel Commodities Broking Pvt., said from the southern Indian city of Hyderabad.

The dollar traded at 114.51 against the Japanese currency and 1.2804 against the euro.

Growth of the U.S. economy, the world's largest, slowed to an annual pace of 2.5 percent in the second quarter, less than half the 5.6 percent rate of the previous three months.

Among other precious metals, platinum rose $5.50 to $1,250 an ounce, while palladium gained $1 to $318. Silver rose 5 cents to $11.81.