INFLATION

Gold gained on Friday, with investors keen to drive the metal to a record high of $850 an ounce as the dollar tumbled to an all-time low and oil rallied.

Consumer sentiment posted a surprisingly sharp fall in early November, hitting its lowest in two years as high energy costs and falling home prices pummeled confidence, a survey released on Friday showed. The bleak sentiment could also be complicated by a spike in price expectations, which may make an inflation-wary Federal Reserve less likely to cut interest rates to shore up the consumer-driven economy.

While the economy has been “resilient in recent months,” policy makers at the Federal Reserve do not see that such performance is likely to be sustained in the near term, as inflationary pressure increases, Federal Reserve Chairman Ben Bernanke said Thursday.

Japanese investors held onto their cash instead of piling more into investment trusts in October, data showed on Thursday, a sign that the U.S. mortgage mess and ensuing market turmoil may be hurting their appetite for risk.

Technology stocks fell on Thursday as investors worried that the spillover from the credit crisis may be starting to hurt business spending.

Federal Reserve Chairman Ben Bernanke said on Thursday the U.S. economy has been resilient in the face of credit market strains but it faces risks on both the growth and inflation fronts. he added that sharp increases in the prices of crude oil have put upward pressure on inflation and may impose further restraint on economic activity

The outlook of the U.S. interest rate policy is asymmetric, with further rate cutting bigger than the potential for increases, said St. Louis Federal Reserve Bank President William Poole on Wednesday.

HONG KONG, Nov 7 (Reuters) - Oil soared above $98 a barrel for the first time on Wednesday and gold rose to a 28-year high as investors sought shelter from the falling dollar, which plumbed all-time lows.

Does Asia have more to fear from rising petrol prices as crude oil hurtles towards $100 a barrel than it does from slowing growth in its biggest export market of the United States?

Oil was on the cusp of the landmark $100 a barrel level on Wednesday, helping push gold towards a record $850 an ounce as an embattled dollar hit new lows.

Non-farm worker productivity increased at the strongest rate in four years during this year's third quarter, the government said on Wednesday in a report implying the economy could keep growing without generating inflation.

Australia raised its key interest rates by a quarter percentage point Wednesday, its second hike in 2007, to contain inflation.

Precious metals raced higher on Tuesday, boosted by an ailing dollar and strong oil, with gold hitting 28-year highs, silver soaring to its best price in 27 years and platinum setting a record.

Ben Bernanke may not have many soothing words for Wall Street this week as the Federal Reserve hammers home its point that it will take more than a modest economic slowdown to pry loose more interest rate cuts.

Gold retraced early losses to hit a 28-year high on Monday on flight-to-quality demand due to credit-market jitters, offsetting lower crude prices and a stronger dollar.

Gold drifted lower on Monday tracking weaker oil but held above $800 an ounce, with an ailing dollar and positive fundamentals seen helping the metal to touch a record high set in early 1980.

Gold dipped but held firm above $800 an ounce on Monday because of surging oil and prices and a weak U.S. dollar and dealers said strong fundamentals could help the metal retest a record high of $850 soon.

The dollar dropped to a record low against the euro and a major currency basket on Friday, on persistent worries about credit and unreported losses at financial firms, which overshadowed a strong U.S. payrolls report.

Market forces are coming up against China's command of the economy, and central planners seem to be bending, just a bit.

Gold prices hit a 28-year high on Thursday, a hair's breadth away from the key $800 mark, stoked by a tumbling dollar, record-high oil and inflation concerns.

World stocks dropped from earlier all-time highs on Thursday while the dollar rebounded from a record low after the Federal Reserve made a widely-expected U.S. interest rate cut and moderated expectations of further easing.