Gold traded above $600 an ounce for the first time in more than two weeks after a recovery in oil prices sparked buying by investors and restored the metal's role as a hedge against inflation.

But analysts questioned whether gold's jump of $30, or five percent, in a week suggested the metal was on a recovery path after it took a hammering earlier this month.

"I don't think we are in a position to move dramatically higher in the short term. Technically, the market is looking a little bit overdone," said Jeremy East, head of trading at Standard Chartered Bank.

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"It's been a gradual rise. I am not really convinced that we are making new highs this year," he said, adding gold might fall again on any drop in oil prices.

Spot gold rose to $604.25, its highest since September 11, and was at $603.10/604.10 by 0934 GMT, against $599.90/560.90 late in New York on Wednesday.

Gold has tracked movements of oil in recent weeks, falling to a near-three-month low of $571.20 in mid-September. Prices spiked to a 26-year high of $730 an ounce in May.

Oil nudged to a seven-day peak just above $63 a barrel, building on the previous day's $2 rise, but later steadied.

Bullion's rise pushed up shares in gold miners in Australia and Hong Kong. Newcrest Mining (NCM.AX: Quote) was up 2.4 percent, Lihir Gold (LHG.AX: Quote) rose 2.14 percent and Lingbao Gold Ltd (3330.HK: Quote) added 1.21 percent.

PHYSICAL BUYING SUFFERS

Physical trade slowed to a trickle as higher prices limited purchases by jewelers, but dealers said seasonal demand from main consumers such as India, China and Japan might help bullion to hold above $600.

"As we set ourselves to enter the fourth quarter, the market will watch closely the physical demand by jewelers, especially in India," Investec Australia in Sydney said in a daily report.

Dealers were awaiting more U.S. economic data to assess whether the Federal Reserve's next move would be to cut interest rates. A final reading for second-quarter growth was due on Thursday and a key inflation report on Friday.

The dollar was off marginally against the euro.

In other metals, silver rose to a two-week high of $11.76 an ounce before settling at $11.71/11.76, up from $11.59/11.66 late in New York.

Platinum rose to $1,150/1,155 an ounce from $1,135/1,143. Palladium rose to $318/323 an ounce from $316/320 in the U.S. market.

In industry news, Turkey's first gold-based Exchange Traded Fund (ETF) started trading on the Istanbul Stock Exchange on Thursday, the manager of the fund said.

Gold production at South Africa's South Deep mine is expected to slide by nearly 60 percent year-on-year in the second half following two accidents, half-owner Western Areas Ltd (WARJ.J: Quote) said.