Gold continued its record-setting climb Thursday, rallying to a fresh high as the dollar weakened. Gold rose to as high as $1,062.70 an ounce on the New York Mercantile Exchange before settling at $1,056.30, up $11.90, or 1.1 percent. Gold had plowed past its previous record on Tuesday, and has posted new highs each day since then. Prices have rallied 21.7 percent from a recent low of $867.90 an ounce in April, and are up 5.2 percent this week alone. The unrelenting rise comes as the dollar continues to fall against other currencies. Gold is used as a hedge against a weak greenback, which can trigger inflation. The US Dollar index, which tracks the dollar against a group of other currencies, hit its lowest level since last August on Thursday, and was recently down 0.6 percent. Analysts say there is little standing in the way of more advances for gold. “The only way this doesn't continue would be a stronger dollar,” said David Beahm, vice president of economic research at Blanchard and Co., a precious metals investment firm. “I can't find anybody out there that is saying that is going to happen.” The dollar has fallen steadily since early March as investors, more upbeat on the economy, dump traditionally safe-haven assets and move into riskier investments like stocks. The dollar has also taken a beating this year from the government's record-low interest rates and massive fiscal spending designed to get the economy back on its feet. Though data continues to suggest that inflation is not an immediate threat, investors believe that so long as the Federal Reserve keeps interest rates low, the dollar will continue to fall. “Gold is an early predictor of inflation, so even though inflation may be a year or two down the road, gold typically begins moving earlier,” said Jeffrey Nichols, managing director of American Precious Metals Advisors. Australia surprised financial markets earlier this week when it became the first major economy to raise interest rates, leading some to question whether the Fed will be pressured to raise its own rates sooner rather than later. Most analysts expect the Fed to stand pat on rates for now. Other precious metals, particularly silver, have benefited from gold's rise. December silver rallied 31.5 cents to $17.8150 an ounce, after earlier rising to $17.9550, its highest point since July 2008. Among other precious metals, October platinum jumped $25.50, or 2 percent, to $1,346 an ounce. Palladium rose 2.7 percent. December copper futures rose 11.9 cents, or 4.3 percent, to $2.8985 a pound. In addition to the weak dollar, there was good news on the economic front Thursday that helped lift commodities. The dollar came under fresh pressure Thursday as comments from the European Central Bank sparked volatile trade and positive US corporate news fueled a move to riskier assets. The euro rose to 1.4791 dollars at 2100 GMT against 1.4689 late Wednesday in New York. The single currency at one point bounced briefly above 1.48 dollars, not far from its 12-month high last month. The dollar was meanwhile weaker against the Japanese currency, falling to 88.39 yen from 88.60. A closely watched index on retail sales posted its first gain in more than a year and aluminum maker Alcoa Inc. reported a surprisingly strong quarterly profit. News from the Labor Department that initial claims for jobless benefits fell more than expected last week also cheered the market. The day's news sent major stock indicators up more than 0.5 percent. Oil prices rose to settle above $71 a barrel on Thursday, supported by better-than-expected economic data and a weaker US dollar. US crude for November delivery settled at $71.69, up 2.12. The contract closed $1.31 lower at $69.57 a barrel on Wednesday. In London, Brent crude settled at $69.77, up $2.57. Elsewhere on the Nymex, crude prices jumped $2.12 to settle at $71.69 a barrel. Cocoa prices hit a new contract high, rising to $3,280 a ton before settling up $2 at $3,244 a ton. Orange juice jumped 4.6 percent, while coffee rose 2.7 percent. On the Chicago Board of Trade, December wheat futures rose 10.75 cents to $4.74 a bushel, while corn for December delivery added 4.25 cents to $3.64 a bushel. November soybeans jumped 24 cents to $9.36 a bushel. Bucking the broad trend in commodities, March sugar fell 2.5 percent, losing 0.58 cent to 22.54 cents a pound. Choppy trade followed comments from European Central Bank president Jean-Claude Trichet, who said the economic storm lashing the eurozone economy was abating. The ECB earlier had held its key interest rate at 1.0 percent. The ECB action “has triggered a tremendous amount of volatility in the euro-dollar rate,” said Kathy Lien at Global Forex Trading. “Initially the currency pair raced to a high of 1.48 as the optimistic comments from ECB president Trichet and lack of new concerns on the euro reinforce the recovery story,” she said. The US is suspected in some quarters of preferring to allow its currency to slide in order to boost the competitiveness of US exports and help a fragile economic recovery. Analysts said at least three Asian central banks had intervened in currency markets earlier Thursday.
