By Dave McCombs

Oct. 26 (Bloomberg) -- Platinum futures in Tokyo rallied, snapping a two-day decline, as China's economic expansion and soaring oil prices fueled demand for precious metals as a hedge against inflation.

Economic growth exceeded 11 percent for a third straight quarter in China, the government reported yesterday. September consumer price inflation was 6.2 percent, more than double the central bank's 3 percent annual target.

``The clincher is that the numbers out of China are not adjusted for oil,'' Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said by phone. ``You've got inflation there that could be anywhere up to 12 percent.''

Platinum for August delivery gained 79 yen, or 1.5 percent, to 5,247 yen a gram ($1,428 an ounce) as of 1.05 p.m. on the Tokyo Commodity Exchange. The most-traded contract jumped to a record 5,284 yen a gram on Oct. 15.

Metal for immediate delivery gained 0.3 percent from New York yesterday, to $1,452.50 an ounce. Palladium was unchanged at $365 an ounce.

Gold rose to the highest in 27 years as the dollar slumped yesterday against the euro and crude oil rallied to a record $91.10 a barrel. Silver also gained.

Inflation may prompt investors to buy gold, silver and platinum because the metals, which trade globally in dollars, may hold their value should increases in consumer prices erode the value of other assets denominated in the U.S. currency.

To contact the reporter for this story: Dave McCombs in Tokyo at dmccombs@bloomberg.net .