...from its Gold resources Gold within sight of $1,000 an ounce Angela Balakrishnan The Guardian February 29 2008 Gold leaped to a new record today within sight of the $1,000 mark after oil also powered to a fresh high overnight. Soaring commodity prices sparked fears of spiralling inflation despite signs that the global economic growth is set to ease this year led by a recession in the US. Gold jumped to $975.90 an ounce, a gain of more than 16% this year on the back of the surge in energy prices. Expectations of further interest rates cuts by the US Federal Reserve to avert recession has sent the dollar plummeting against a basket of other currencies and to new lows against the euro. The dollar was today trading just below the record low of $1.52 against the euro and at a three-year low against the yen. Investors are flocking to buy up the precious metal as a hedge against rising prices. Gold is also seen a safe haven by investors during times of stock market volatility and economic uncertainty. Silver also gained strength, rising to a 27-year peak, while palladium rose to its highest level in more than six years. Crude oil set another historic high of $103 a barrel on the back of the dollar weakness and news that supply has been hit in Ecuador and Europe. It later edged down to $101.55 a barrel. Oil has now hit a record high in both nominal and inflation-adjusted terms as well. According to analysts at precious metals consultancy group GFMS, gold was still way of its inflation-adjusted record of $2,079 an ounce. "Most of the funds are buying inflation hedges such as gold, silver and oil," said William Kwan, a dealer at Phillip Futures in Singapore. "I think inflation is really getting out of hand." The Fed is expected to cut interest rates again at its meeting next month by 50 basis points to 2.5%, after Fed chairman Ben Bernanke stressed of downside risks to growth in his testimony to Congress. In eight days in January, the Fed slashed rates by 1.25 percentage points, the biggest one-month reduction in a quarter of a century. However, Bernanke also acknowledged that the US was facing greater inflation pressures now compared to 2001, when the economy last saw a big downturn.