Oil prices rose Monday as strong U.S. housing data pressured the dollar and lifted expectations an economic rebound will bolster fuel demand?.

Sales of previously owned U.S. homes rose in October at a faster-than-expected pace to the highest in more than 2-1/2 years as buyers rushed to take advantage of a popular tax credit, according to a survey by the National Association of Realtors.

Oil markets have looked toward broad economic data this year for signs of an economic rebound that could boost flagging fuel demand.

U.S. light, sweet crude $77.44 settled 9 cents higher at $77.56, off earlier highs of $79.92 a barrel. London Brent crude $77.43 rose.

Further strength came as the positive economic data prompted investors sell the U.S. dollar for risker plays in equities and commodities. U.S. stock markets traded up, with the S&?;P 500 on track to snap a 3-day sell-off.

Investors have been buying into commodities in a bid to hedge against the dollar's weakness and to guard against concerns ultra-easy monetary policy could lead to a jump in inflation as the world's economy recovers.

Gold soared to a fresh record high of $1,170.55 an ounce Monday, bringing this year's gains to around 33 percent, as the dollar slipped towards $1.50 against the euro.

The National Association for Business Economists, a group of U.S. business economists, boosted their forecast for economic growth over the next year, but said the jobless rate will remain stubbornly high.

Analysts said Iran's large-scale air defense war games Sunday were also supportive for oil prices, as the world's fourth-largest crude exporter demonstrated its deterrence capabilities in the face of pressure from the West over its nuclear program.

"The rising Iran tensions, alongside U.S. dollar weakness and gold's record high levels, have helped buoy oil prices," said Michelle Kwek, an analyst at Informa Global Markets in Singapore.

Data showed China's apparent oil demand in October rose 10.3 percent from a year earlier, the seventh rise in a row, as refiners produced at record rates among more signs of a solid recovery in the world's No. 2 oil consumer.