July 18 (Bloomberg) -- Gold was little changed after rising Friday from a six-week low as gains in the oil price boosted the metal's appeal as a hedge against inflation.

Crude oil rose today after Mexico shut offshore fields as Hurricane Emily approached the Yucatan Peninsula. Gains in gold may be limited after the U.S. said July 15 that industrial production rose last month and a survey showed U.S. consumer confidence increased, Westpac Banking Corp. said. A stronger dollar erodes gold's appeal as an alternative investment.

``We're going to see, I believe, further pressure on the gold price,'' Keith Huggan, an economist at Westpac in Sydney, said today in an interview. The dollar ``is still the main driver for gold prices.''

Gold for immediate delivery rose 25 cents to $421.80 an ounce at 3:45 p.m. Sydney time, compared with the 5 p.m. close in New York on July 15. On July 15, gold rose 0.5 percent from its lowest close since June 1.

The dollar traded at $1.2049 against the euro at 3:45 p.m. Sydney time, from $1.2035 late July 15 in New York according to EBS, an electronic currency dealing system. The euro fell 0.4 percent on July 15.

U.S. industrial production rose 0.9 percent in June, the Labor Department said July 15, more than twice the forecast in a Bloomberg News survey of economists. The University of Michigan's index of consumer sentiment rose to 96.5, from 96 in June.

Fifty-four percent of 50 traders, strategists and investors surveyed by Bloomberg News on July 15 advised buying the dollar against the euro this week. Twenty percent said sell. Fifteen of 35 traders, investors and analysts advised selling gold. Eleven recommended buying the metal.

Hedge-fund managers and other large speculators decreased their net-long position in New York gold futures by 30 percent in the week ended July 12 according to U.S. Commodity Futures Trading Commission data.

Speculative long positions or bets gold prices will rise outnumbered short positions by 73,722 contracts on the Comex division of the New York Mercantile Exchange, the Washington- based commission said in its July 15 report.

``Following the net fall in the speculative long position on Comex, gold is now facing increased selling pressure, particularly when you consider a stronger dollar,'' said Darren Heathcote, head of trading at N.M. Rothschild & Sons (Australia) Ltd. in Sydney.

Gold for August delivery rose 80 cents, or 0.2 percent, to $422.10 an ounce in after-hours trading on the Comex division of the New York Mercantile Exchange at 3:21 p.m. Sydney time.

To contact the reporter on this story: Matt Chambers in Melbourne at mchambers1@bloomberg.net

Last Updated: July 18, 2005 02:16 EDT