Weak Dollar Pushes Gold Above $1,100 an Ounce

Gold prices climbed to another new high Monday as the U.S. dollar sank to a 15-month low.

FILE - In this Jan. 14, 2009 file photo, Rishi Babber displays gold necklaces at RPS Jewellers in...

FILE - In this Jan. 14, 2009 file photo, Rishi Babber displays gold necklaces at RPS Jewellers in Southall, London. Gold prices climbed to another new high Monday, Nov. 9, 2009, as the U.S. dollar sank to a 15-month low. (AP Photo/Kirsty Wigglesworth, file)

(AP)

Gold for December delivery soared as high as $1,111.70 on the New York Mercantile Exchange before settling at $1,101.40 an ounce, up $5.70, or 0.5 percent.

The gains came as the ICE Futures US dollar index, which measures the dollar against other currencies, dropped more than 1 percent to its lowest level since August 2008.

The dollar weakened after finance ministers from the Group of 20 countries pledged over the weekend to maintain their stimulus efforts and keep interest rates low to further a global economic recovery. The G-20 leaders did not address how they might support currencies that have fallen in response to low rates.

U.S. rates are near zero, which has contributed to the dollar's decline. Gold, meanwhile, is seen as a hedge against the weak dollar and inflation, which investors fear could become a problem down the road if the greenback keeps falling.

"Short-term traders are looking at gold as an inverse play on the dollar," said Nicholas Brooks, head of research and investment strategy at ETF Securities in London.

Other commodities that are bought and sold in dollars have benefited from the greenback's slide because foreign investors can buy more with less money.

In other Nymex trading, December silver rose 10.5 cents to $17.48 an ounce, while December platinum rose $19 to $1,364 an ounce. December copper futures added 1.5 cents to $2.9675 a pound.

In addition to the weaker dollar, jitters over tropical storm Ida helped support higher energy prices Monday. However, forecasters say the storm will likely weaken and bypass most drilling platforms and refineries in the Gulf of Mexico.

Light, sweet crude for December delivery rose $2 to settle at $79.43 a barrel.

Heating oil futures rose 5.92 cents to $2.0627 a gallon and gasoline futures gained 5.75 cents to $1.9818 a gallon.