Gold extended gains on Wednesday as inflation fears stoked by record high oil prices boosted the metal's safe-haven appeal in times of uncertainty. Gold has bounced more than 7 percent since falling to a one-week low at $873.50 an ounce last week, mainly driven by rising oil prices, but it remained below a record high of $1,030.80 hit in March.

Gold rose to $939.15/940.15 an ounce from $938.40/939.40 late in New York. It rallied to hit a high of $945.80 an ounce on Tuesday, its strongest since April 18, on the back of rising oil prices and weak stock markets.

The things that have driven it up seem to be hanging around. Obviously oil has been forever there and remains a concern to many worrying about the consequential effects on inflation, said Darren Heathcote of Investec Australia in Sydney.

For the time being, I suspect, gold will remain relatively strong. Whether it would break higher through the $950s is yet to be seen. But I suspect there could be potential for it in the next few days, week ahead, he said.

Oil rose $1.28 a barrel to $142.25 on Wednesday, holding near Monday's record high above $143, on forecasts that global supplies will struggle to keep pace with demand as well as on tensions between Israel and Iran.

Investors would also watch movements in the dollar ahead of the release of economic data from the United States later in the day and the European Central Bank's policy meeting on Thursday.

Today, we are likely to be rangebound in the sort of $932-$946 area, said Heathcote, adding that a decision by the ECB to raise rates would result in a weaker dollar.

The euro barely changed $1.5790 The ECB is widely expected to lift interest rates by a quarter-percentage point to 4.25 percent this week.

Investors await June U.S. private sector jobs numbers and May factory orders on Wednesday for what they have to say about Thursday's employment data and the pace of economic growth.

There is some buying but it looks like selling also emerges above $940. I guess people are probably waiting for the ECB, said a dealer in Hong Kong.

Definitely, there's no physical buying, said the dealer, referring to demand from jewellers.

Gold futures for August delivery on the COMEX division of the New York Mercantile Exchange fell $2.6 an ounce to $941.9 on profit taking after settling nearly 2 percent higher.

Silver was little changed at $18.07/18.13 an ounce from $18.08/18.13 late in New York on Tuesday, when it rallied as high as $18.19, its loftiest level since May 27, to track gold.

Spot platinum rose to $2,074.00/2,094.00 an ounce from $2,069.00/2,089.00 late in New York.

Spot palladium was steady at $464.50/472.50 an ounce.

The most active Tokyo platinum contract for June 2009 delivery on the Tokyo Commodity Exchange ended the morning session 41 yen per gram higher at 6,999 yen.