Gold Nears $1,000 on Weak Dollar
By Stevenson Jacobs
Source: http://ap.google.com/article

NEW YORK (AP) — Gold prices moved within striking distance of $1,000 an ounce Monday, surging to another record after the dollar tumbled to an all-time low and crude oil surpassed its inflation-adjusted high.

Silver extended recent gains to reach another 27-year high, while platinum also rose to a record. Other commodities advanced broadly, with soybean and corn futures both rising to new highs.

The dollar briefly fell to a historic low Monday on news that construction spending plummeted. The euro bought as much as $1.5266 earlier Monday but later gave up some gains and was trading at $1.5180 Monday afternoon.

A series of Federal Reserve interest rate cuts has battered the dollar, which lost nearly 10 percent against the euro in 2007. Lower interest rates tend to weaken the dollar and prompt investors to shift resources into hard assets like gold, which is known for holding its value in times of rising inflation and economic uncertainty.

“Inflationary expectations are up around the world and that affects gold because precious metals are being bought to maintain purchasing power,” said George Gero, vice president at RBC Capital Markets Global Futures in New York.

Gold for April delivery jumped $12 to fetch $987 an ounce Monday on the New York Mercantile Exchange, after earlier rising as high as $992 an ounce — feeding expectations that the metal will soon surpass the psychologically important $1,000 mark. Gold prices shot up nearly 32 percent in 2007 and are up more than 15 percent this year.

“The speculative crowd remains firmly fixated on the fulfillment of the four-digit price tag being affixed to a one-ounce chunk of gold,” Jon Nadler, analyst with Kitco Bullion Dealers Montreal, said in a note.

Other precious metals also rose Monday. Silver jumped to its highest level since 1980, with the March contract adding 39.2 cents to reach $20.20 an ounce on the Nymex. Earlier, silver rose to a record $20.610 an ounce.

Platinum for April delivery added $56.30 to $2,237 an ounce on the Nymex, after earlier rising to an all-time high of $2,240 an ounce. Nymex copper, meanwhile, gained 6.05 cents to fetch $3.9125 a pound and earlier rose to a record $3.97.

The advance of precious metals has corresponded closely with rising crude oil prices, which jumped to an inflation adjusted record high Monday of $103.95 before easing back slightly. That’s above the $103.76 a barrel that many analysts consider to be the true record high for oil, after its $38 barrel price from 1980 is translated into 2008 dollars.

Light, sweet crude for April delivery pulled back slightly in afternoon trading, adding $1.64 to fetch $103.48 a barrel on the Nymex.

Other energy futures also rose. April gasoline futures gained 4.39 cents to $2.7138 a gallon on the Nymex, while April heating oil futures rose 5.35 cents to $2.8604 a gallon.

Meanwhile, agriculture futures rose broadly with soybeans hitting to a record amid expectations of growing demand in China.

Soybeans for May delivery jumped 27.5 cents to $15.64 a bushel on the Chicago Board of Trade, after earlier rising to an all-time high of $15.865 a bushel.

Wheat for May delivery surged 46 cents to $11.32 a bushel, while March corn added 10.25 cents to $5.5625, after earlier rising to a record $5.61 a bushel.

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