Gold prices climbed Wednesday, benefiting from more weakness in the dollar. Other commodities, including oil and grains, also rose.
Gold prices gained ground as the dollar sank to a fresh low against the pound for the year and to its lowest level against the euro since January.
Investors use gold to offset the risk of inflation, which can be triggered by a weak dollar. The dollar has been falling in recent weeks amid an improving economic outlook and renewed confidence on Wall Street, which has sent investors in search of more risky assets like stocks.
Despite more money flowing back into the stock market, gold prices have remained relatively stable, underpinned by an unrelenting fear of inflation.
As the economy improves, prices for goods and services will increase, which could lead to inflation down the road. At the same time, the Federal Reserve has kept interest rates at record low levels and continues to pour money into the financial system, which has the potential to weaken the dollar further.
Gold for June delivery rose $10.70 to settle at $937.40 an ounce on the New York Mercantile Exchange - the highest close since March 26.
Other metals also rose. July silver added 15.5 cents to $14.28 an ounce, while July copper futures rose 3.7 cents to $2.1065 a pound.
On Wall Street, stocks rose but were off their earlier highs. Investors initially cheered news that troubled banking giant Bank of America Corp. raised $13.5 billion through the sale of common stock. However, uncertainty about the health of banks still plagues the market.
Oil prices surged on the Nymex, hitting a six-month high, as a government report showed a drop in U.S. oil supplies for a second straight week. Investors cheered the decline as a sign that the supply side of the market is finally catching up with a drop in demand.
Light, sweet crude for July delivery rose $1.94 to settle at $62.04 a barrel, after earlier rising as high as $62.14 - the highest price for crude since Nov. 11.
Gasoline futures rose less than a penny to $1.7788 a gallon, while heating oil futures were up 5.28 cents to $1.5645 a gallon.
Grain prices moved higher on the Chicago Board of Trade.
July wheat futures gained 9 cents to $5.9775 a bushel, while corn for July delivery inched up 0.25 cent to $4.26 a bushel.
July soybeans added 7 cents to $11.69 a bushel.
