Gold Sets New Record Of $1,143 As Dollar Falls

SARA LEPRO

NEW YORK (AP) — Gold kept up its record-setting pace Monday, hitting a fresh high of more than $1,140 an ounce as the dollar tumbled.

The weaker dollar also helped push other metals like copper and silver sharply higher, and oil prices rebounded from their lowest levels in a month. Dollar-denominated commodities become cheaper for foreign buyers when the dollar falls.

December gold futures settled up $22.50, or 2 percent, at $1,139.20 an ounce on the New York Mercantile Exchange and touched a new high of $1,144.20 in after-hours trading.

Once again, a falling dollar triggered the advance, but more buyers piled on as the price kept rising.

"The gains build upon themselves," said Dave Meger, vice president and director of metals trading at Vision Financial Markets.

The ICE Futures US dollar index, which measures the dollar against other currencies, dropped 0.9 percent in afternoon trading. The dollar has weakened consideraby this year as the Federal Reserve kept interest rates at a record low of near zero, driving investors to look for other places to park their money. Gold in particular has benefited from the weak dollar since it's seen as a good hedge against a falling dollar and inflation. Analysts say gold's surge is also being driven by a wave of short-term, speculative buying.