Weak dollar and firmer oil lift gold $3/oz

SYDNEY, Apr 16 (Reuters) Gold on Monday rose more than $3 an ounce to a new six-week high, building on Friday's strong price gains and helped by inflationary fears.

Spot gold was at $687.20/$687.70 an ounce by 0552 GMT versus $684.30/$684.80 an ounce late in New York Friday after rising more than $2 from the London fix.In earlier trading Monday, gold went as high as $688.10 an ounce, its costliest since Feb. 27.

''We're seeing gold react to a general weakness in the dollar,'' a dealer said, adding firmer oil prices were also tipping some investors into bullion.

U.S. light, sweet crude for May delivery rose 14 cents to $63.77 a barrel.

Gold surged to a six-week high on Friday and silver followed to hit a 1-{ month peak. Platinum and palladium also climbed to multi-month highs.

The Australian dollar was trading just below a 17-year peak against the dollar, while the euro had edged up to a two-year high and was approaching the all-time high of $1.3670 struck in December 2004. In Tokyo, the benchmark February gold contract was up 55 yen from the last settlement at 2,662 yen.

Bullion's upward moves underpinned gains in Australian gold producers, with Lihir Gold ltd. rising more than 4.6 percent, Newcrest Mining up a half a percentage point and Mundo Minerals Ltd. 6.9 percent higher.

Silver cost $14.08/$14.11 an ounce versus $14.04/$14.09.

Platinum was at $1,279/$1,284 an ounce against $1,272.00/$1,277.00 an ounce late in New York.

Palladium was at $376.00/$381.00 an ounce versus $375.00/$380.00.

REUTERS SR HT1218