Gold sets another record high

NEW YORK (AP) – Gold set another record high and other commodities chalked up broad gains Thursday as the dollar weakened and investors sought protection against inflation.

Much of the action was triggered because the dollar grew weaker against other currencies, a day after the Federal Reserve said it would buy $600 billion of bonds by the middle of next year to try to boost economic growth.

Since commodities are priced in dollars, a weaker dollar also gives buyers who use foreign currencies an advantage.

The combination of the Fed’s decision and the weaker dollar was perceived by traders as inflationary, Newedge metals analyst Mike Frawley said.

“With or without the Federal Reserve action, we’re living in a world that is going through an expansionary and inflationary phase,” he said.

Gold for December delivery settled at a record high of $1,383.10 an ounce, up $45.50, or 3.4 percent.

Many analysts expect the price to continue to climb, perhaps hitting $1,450 an ounce by year end. “Next year, who knows? If this continues like this we can march on higher,” MF Global senior commodities analyst Edward Meir said.

In other metals contracts for December, silver jumped $1.607 to settle at $26.043 an ounce, copper gained 12.7 cents, or to settle at $3.9120 a pound and palladium rose $32.05 to $674.75 an ounce.

January platinum rose $58.70 to settle at $1,755.90 an ounce.

Energy prices benefited from the weaker dollar, too.

Benchmark crude for December delivery rose $1.80 to settle at $86.49 a barrel on the New York Mercantile Exchange.

In other December energy contracts on the Nymex, heating oil added 4.52 cents to settle at $2.3731 a gallon, gasoline gained 3.91 cents to $2.1771 per gallon while natural gas rose two cents to $3.856 per 1,000 cubic feet.

In grains and beans, December wheat rose 23.5 cents to settle $7.1375 a bushel, December corn added 9 cents to $5.90 a bushel and January soybeans gained 37.25 cents to $12.7475 a bushel.