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Breaking from Moneynews.com Gold Surges to Record on Outlook for Sagging Dollar, US Rates Gold futures rose to a record $1,524.20 an ounce on speculation that the Federal Reserve will be slow to raise U.S. borrowing costs, weakening the dollar and boosting the appeal of the precious metal as an alternative asset. The dollar fell to the lowest since December 2009 against the euro after the Fed kept borrowing costs at a record low and said it would continue $600 billion in bond purchases through June. The European Central Bank this month began raising rates to stem inflation. “This move is about the dollar,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “There’s no hint whatsoever of the Fed being close to raising rates, so people are buying gold.” Gold futures for June delivery rose $13.60, or 0.9 percent, to settle at $1,517.10 at 1:48 p.m. on the Comex in New York. After the close, the metal reached the all-time high. The price has gained 31 percent in the past year. Gold for immediate delivery rose as much as 1.2 percent to a record $1,523.82. The price traded at $1,521.28 at 2:46 p.m. The Fed has kept its benchmark rate at zero percent to 0.25 percent since December 2008 to stimulate the economy. Today, the central bank raised its estimate for core inflation and reduced its growth outlook for 2011. Earlier this month, the European Central Bank raised its main lending rate by a quarter point to 1.25 percent and signaled it will continue with increases to stem inflation. Dollar ‘Suffering’ “There’s not a lot the Fed can do to ease the dollar’s suffering,” said Matthew Zeman, a strategist at Kingsview Financial in Chicago. “The U.S. will be behind in the tightening cycle, and that’s a green light to buy gold.” Silver futures for July delivery rose 90.8 cents, or 2 percent, to $45.987 an ounce. Two days ago, the metal, which has doubled in the past 12 months, reached a 31-year high of $49.845. Palladium futures for June delivery climbed $2.40, or 0.3 percent, to $758.10 an ounce on the New York Mercantile Exchange. The price has advanced 38 percent in the past 12 months. Platinum futures for July delivery gained $13.80, or 0.8 percent, to $1,819.20 an ounce. The metal has gained 5.7 percent in the past year. © Copyright 2011 Bloomberg News. All rights reserved.