STEVENSON JACOBS ASSOCIATED PRESS NEW YORK (AP) - Gold prices shot up above $900 an ounce Wednesday after the Federal Reserve slashed its key interest rate, undercutting the dollar and boosting demand for hard assets as an inflation hedge. Silver also rose. In a coordinated effort with central banks around the globe, the Fed lowered its benchmark federal funds rate from 2 percent to 1.5 percent. The Bank of England and the European Central Bank also lower their key rates, as did central banks in China, Canada, Sweden and Switzerland as part of an emergency effort to unclog world credit markets and prevent a global economic collapse. Lower interest rates can boost the economy by making credit cheaper, but they also tend to depress the dollar. That encourages investors to shift money into commodities like gold and silver, which are known for holding their value during times of rising inflation. Gold for December delivery jumped $24.50 to settle at $906.50 an ounce on the New York Mercantile Exchange, after earlier rising as high as $924.90. Gold has jumped $104 _ or 13 percent _ in the past month as a widening financial crisis batters stock markets across the globe, spurring investors to buy the safe-haven metal. Still, Jon Nadler, analyst with Kitco Bullion Dealers Montreal, said gold should be trading higher "in the wake of these apparently desperate attempts by officialdom to keep the fabric of the markets from ripping apart." "Today would be the ideal day to really make a stab at much higher values," Nadler said in a note. Other precious metals traded mixed. December silver surged 39.2 cents to settle at $11.772 an ounce, while December copper fell 17.95 cents to settle at $2.355 a pound _ after earlier tumbling to a 19-month low of $2.285. In energy markets, oil prices closed down Wednesday after touching their lowest level this year, pressured by a huge jump in U.S. crude inventories and more signs of dwindling demand. Light, sweet crude for November delivery fell $1.11 to settle at $88.95 on the Nymex. Oil at one point fell to $86.05 _ the lowest price since Dec. 6, 2007. In other Nymex trading, heating oil futures fell 1.12 cents to settle at $2.4945 a gallon, while gasoline futures fell 3.3 cents to settle at $2.0298 a gallon after earlier falling to a one-year low. In agriculture trading, grain prices rose on the Chicago Board of Trade. Wheat for December delivery rose 4.75 cents to settle at $6.08 a bushel, while December corn added 10.5 cents to settle at $4.275 a bushel. November soybeans rose 38 cents to settle at $9.64 a bushel.

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