Precious metal reaches record closing high

Gold futures closed at the highest price ever overnight Friday as the US dollar extended a slump to an 11-month low, boosting demand for the metal as a hedge against inflation.

Against a basket of six major currencies, the greenback dropped for the sixth straight session, touching the lowest level since September 25, 2008.

Gold has climbed 14 per cent this year, while the US dollar has dropped 5.8 per cent. The metal hasn't posted an annual loss since 2000. Gold's gains were "strictly a dollar-inverse play," said Jon Nadler, a senior analyst at Kitco in Montreal.

Gold futures for December delivery rose US$9.60, or 1 per cent, to a record settlement of US$1006.40 an ounce on the Comex division of the New York Mercantile Exchange. The metal gained 1 per cent last week.

Earlier, gold reached US$1013.70 as an increase in energy costs signalled that the inflation rate may accelerate.

The metal reached a record intraday high of US$1033.90 on March 17, 2008.

Gold may extend the rally "given concerns over rising inflation and our expectations for the dollar to weaken further", said Suki Cooper, an analyst at Barclays Capital in London.

- BLOOMBERG