When inflation picks up, people turn to gold.
(Bloomberg) -- Gold traded near a record, platinum reached its highest ever and silver rose to a 27-year peak as a weakening dollar increased the allure of precious metals as alternative investments.
The dollar was headed for a third weekly loss against the euro on bets benchmark borrowing costs in the U.S. will fall below those in Europe for the first time in more than three years this month. Investors also bought the metal on concern record oil costs will fuel inflation and as a haven from credit market turmoil, said Juerg Kiener from Swiss Asia Capital Ltd.
Gold climbed to $897.90 an ounce, its highest ever, and traded at $894.84 at 4:17 p.m. Singapore time. The metal has risen 7 percent this year as the dollar declined 1.4 percent against the euro.
Bullion soared 31 percent in 2007, its seventh straight year of gains, as supplies from South Africa, the world's biggest producer, dropped to the lowest in 84 years.