By Kim Kyoungwha April 20 (Bloomberg) -- Gold extended its record-breaking rally to top $1,500 an ounce after the dollar weakened on mounting debt in the U.S. and Europe, prompting some investors to seek bullion as a store of value. Gold for immediate delivery climbed as much as 0.3 percent to $1,500.43 an ounce before trading at $1,498.95 an ounce at 12:39 p.m. in Singapore. Bullion for June delivery in New York rose 0.4 percent to $1,500.90 an ounce. Silver reached the highest level in 31 years. Standard & Poor’s cut the outlook on its AAA rating for the U.S. to “negative” from “stable” two days ago, and yields on Greece’s two-year notes exceeded 20 percent, the highest since at least 1998. The dollar has depreciated 7.6 percent against a basket of currencies in the past year. “The trigger for gold’s recent surge was the S&P downgrading of the U.S. credit rating,” said Gavin Wendt, founding director with MineLife Pty. Coupled with the debt turmoil in Europe and violence in the Middle East, “it’s a perfect storm for precious metals, including gold and silver.” Gold is on course for a 11th straight annual advance, the longest run of gains since at least 1920, as investors increasingly seek to guard against the prospect of currency debasement and accelerating inflation. The metal has risen 5.5 percent this year after a 30 percent jump in 2010. Gold prices may keep rising for some years into the future, BlackRock Inc. fund manager Evy Hambro said on Bloomberg TV’s “On the Move.” David Donora, manager of Threadneedle Asset Management Ltd.’s commodity fund, said in an interview that he would “not be surprised to see” gold at $1,800 an ounce. Commodities Advance The Standard & Poor’s GSCI Spot Index of 24 commodity futures advanced as much as 0.7 percent to 740.57 today. Oil, copper and corn all advanced. Gold for December delivery on the Shanghai Futures Exchange jumped to an all-time high of 314.19 yuan ($48.1) a gram. “Gold and most other commodities are up nicely,” BlackRock’s Vice Chairman Robert Doll told Bloomberg Television. “People are expecting to use more of the commodities and the dollar is declining. Gold does best on uncertainties and the uncertainties are increasing.” The Federal Reserve has kept its benchmark interest rate at zero percent to 0.25 percent since December 2008 and has pledged to buy $600 billion in Treasuries through June to stimulate growth. The European Central Bank this month raised its main rate to 1.25 percent from a record 1 percent to stem inflation. “With interest rates remaining low in most countries, there is little reason not to own gold, as the metal currently offers the best returns around,” MineLife’s Wendt said. Cash silver jumped as much as 0.9 percent to a 31-year peak of $44.3575 an ounce. Palladium rallied 1.6 percent to $744.50 an ounce and platinum gained 1 percent to $1,792.75. --Editors: Thomas Kutty Abraham, James Poole To contact the reporter on this story; Kyoungwha Kim in Singapore at kkim19@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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