Gold ticked higher in volatile trade on Thursday, underpinned by improving investment appetite and gains in other commodities such as oil and metals and despite the dollar rising against the euro.

Platinum touched its highest in six months as dollar weakness over the past couple of days prompted industrial and bargain-hunting buying, lifting palladium by nearly 6 percent to its highest in over four months.

But analysts said with sales sharply down in the auto sector, the main consumer of platinum, the rally lacked fundamentals to support it and was seen short-lived.

Spot gold rose to $938.00 per ounce at 1541 GMT, up from $933.15 an ounce late in New York on Wednesday. Oil hit its highest in four months while copper surged 3 percent.

“Money keeps pushing into commodities on concerns over the money supply in the United States,” said John Meyer, head of resources at Fairfax. “Gold is a popular place to be right now.”

Gold is used as a hedge against financial uncertainty and against inflation, which is expected to soar because of the vast amounts of money being piped into the global economy by central banks and governments.

The U.S. plan to buy long-dated Treasuries further raised those inflationary concerns and have also dented the outlook for the dollar, which in turn is supportive for bullion.

But on Thursday, the dollar was up against the euro , but trade was volatile. After earlier falls, it was up 0.28 percent against a basket of major currencies

NO BOUNCE IN CONSUMPTION

The U.S. economy contracted slightly more than previously estimated in the fourth quarter, pulled down by falling consumer spending and exports, while corporate profits plunged by the biggest margin since 1994.

With this gloomy picture of the world economy and the automotive sector among the hardest hit, analysts see little change to the grim fundamentals for platinum.

“There seems to be every week an announcement of carmakers cutting production. I can’t really see any positivity on the consumption side,” David Wilson, director of metals at Societe Generale, said.

Spot platinum touched $1,159.00 an ounce, its highest since Sept. 26 and was last at $1,1149.50 an ounce versus $1,120 an ounce late in New York on Wednesday.

“The euro being stronger against the dollar has encouraged some industrial buying,” said Commerzbank trader Rory McVeigh, referring to the dollar weakness over the last couple of weeks. “Not much but enough in a very thin market to lift it.”

Platinum’s strength lifted sister metal palladium nearly 6 percent higher to $226.50 an ounce, its highest since Nov. 11. It was at $220 an ounce versus Wednesday’s $208.50 an ounce.

Spot silver firmed to $13.66 an ounce from Wednesday’s $13.45 an ounce.

The poor state of the global economy has boosted investment appetite for gold since the start of the year, with holdings in the world’s largest exchange-traded fund hitting consecutive record highs.

But analysts said the pace of the rise was beginning to slow. “Demand for investment gold is still there, but relatively slower over the last couple of days,” Wolfgang Wrzesniok-Rossbach, head of sales at Heraeus, said.

The SPDR Gold Trust , said its holdings remained at 1,124.99 tonnes on March 25, unchanged from the record hit the previous day.

March 26 (Reuters)