Gold rose to a record in New York as a weakening dollar and inflation prompted investors to buy precious metals.

The dollar fell to the lowest since December 2009 against the euro yesterday after the Federal Reserve kept borrowing costs at a record low. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, have expanded 1.5 percent this month, heading for the biggest gain since August.

“The sinking dollar is driving people to the gold market,” said Lim Han Jo, a Seoul-based trader with Tongyang Futures Co.

Gold for delivery in June rose $9, or 0.6 percent, to the high of $1,540.20 an ounce by 7:57 a.m. on the Comex in New York. The metal for immediate delivery earlier today climbed to a record $1,540.85 an ounce.

Eighteen of 21 traders, investors and analysts surveyed by Bloomberg, or 86 percent, said bullion will rise next week. Three predicted lower prices.

Silver for July delivery climbed $1.279, or 2.7 percent, to $48.82 an ounce and platinum for delivery the same month jumped $9.60, or 0.5 percent, to $1,849.50 an ounce. Palladium for June delivery rose $10.75, or 1.4 percent, to $786.05 an ounce.

To contact the reporter on this story; Kyoungwha Kim in Singapore at kkim19@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Source: http://www.bloomberg.com/news/2011-04-29/gold-heads-for-best-monthly-gain-since-november-2009-on-inflation-dollar.html