NEW YORK (AP) _ Commodities prices surged Wednesday after the Federal Reserve slashed a key interest rate, undermining the dollar and boosting demand for hard assets as a hedge against inflation. The Fed lowered its benchmark federal funds rate from 1.5 percent to 1 percent in an effort revive the ailing U.S. economy and loosen restrained credit markets. Lower interest rates can spur economic growth but tend to depress the dollar as investors go elsewhere for better returns. The 15-nation euro rose to $1.2852 in late Wednesday trading in New York from $1.2597 late Tuesday. Gold prices jumped $13.50 to settle at $754 an ounce on the New York Mercantile Exchange after earlier rising as high as $759. Analysts said the dollar's drop spurred investors to buy the metal, long considered a hedge against inflation and weakness in the U.S. currency. "With more interest rate cuts and more aggressive action by central banks, the indiscriminate selling of financial assets ... has subsided (and) not surprisingly, gold has moved sharply higher," Jeffrey Nichols, managing director of American Precious Metals Advisors. However, gold trading has been volatile lately, and recent rallies often have been followed by sharp selloffs. Other precious metals also rose. December silver soared $1.015 to settle at $8.79 an ounce on the Nymex, while December copper gained 22.95 cents to settle at $2.088 a pound. In energy markets, oil prices rebounded from 17-month lows as stock markets rallied across the globe Wednesday. Light, sweet crude for December delivery rose $4.77 to $67.50 a barrel on the New York Mercantile Exchange. The contract settled at $62.73 Tuesday, the lowest closing price since May 2007. In other Nymex trading, gasoline futures rose 8 cents to settle at $1.53 a gallon, while heating oil gained 9 cents to settle at $2 a gallon. Meanwhile, agriculture futures rose on the Chicago Board of Trade. Wheat for December delivery settled up 47.25 cents at $5.6125 a bushel, while December corn rose 30 cents to settle at $4.2075 a bushel. November soybeans gained 58.5 cents to settle at $9.3725 a bushel.

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