Gold futures rose on Monday after crude-oil contract hit a new record, raising the appeal of precious metals as a hedge against inflation.

Gold for June delivery gained $5.80, or 0.7 percent, to end at $895.50 an ounce on the Comex division on the New York Mercantile Exchange.

Crude oil rose to $119.93 a barrel, the highest ever, after BP Plc shut a North Sea pipeline and a strike and rebel attacks in Nigeria disrupted production.

Gold soared 31 percent last year after oil jumped 57 percent, spurring the biggest increase in the U.S. inflation rate since 1990.

Metals could not help but notice the explosive move in crude, said Edward Meir, an analyst at MF Global, in a research note.

We expect commodities in general to remain firm at least through to midweek, as the strong energy complex sets the tone, while the weakness in the dollar should also help.

In currency markets, the dollar was little changed against the euro today amid speculation the Federal Reserve will further reduce benchmark U.S interest rates at its meeting on Wednesday this week. Dollar-denominated commodity prices tend to rise when the currency drops.

The Fed cut borrowing costs by 3 percentage points to 2.25 percent from Sept. 18 to March 18. During that period, gold jumped 39 percent, reaching a record $1,033.90 an ounce on March 17, while the euro gained 12 percent.

The dollar index, which tracks the value of the greenback against a basket of other currencies, fell 0.1 percent to 72.61.

Also in Nymex metals action, May silver gained 16.3 cents to $17.013 an ounce and May copper rose 2 cents to $3.9355 a pound.

July platinum climbed up $10.60 to $1,978.60 an ounce while June palladium dropped $8.15 to $440.80 an ounce.

Nigeria Crude oil Gold Inflation