Gold Hits Record High on Tumbling Dollar, Firm Oil

Gold surged to a record high above $960 on Wednesday as investors poured money, spurred by a plummeting dollar and oil rising above $102 a barrel., Reuters 2/27/2008 7:15:25 AM

Silver rallied to its loftiest level since November 1980. Palladium jumped to a 6-1/2-year high, while platinum gained 1.7 percent to trade near last week's record highs.

Spot gold rose as high as $964.70 an ounce and was quoted at $958.40/959.20 at 6:13 a.m. EST, against $946.60/947.40 in New York late on Tuesday. It has gained 16 percent this year.

The dollar slid to an all-time low versus a basket of currencies after weak data underscored the gloomy outlook for the U.S. economy and comments from a top Federal Reserve official cemented views for more U.S. rate cuts.

A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.

Oil powered to a new record above $102 a barrel, closing in on its inflation-adjusted peak, as a slumping dollar on lackluster U.S. economic data triggered a surge across commodities markets.