NEW YORK - September 8, 2009 - Gold rose to the highest price since March 2008, topping $1,000 an ounce, while silver climbed to a 13-month high as a weaker dollar and concern that inflation may accelerate boosted the appeal of precious metals.

Bullion surged to $1,009.70 on the New York Mercantile Exchange’s Comex division, taking this year’s gain to as much as 14%. Gold futures, which reached a record $1,033.90 in March 2008, are headed for a ninth annual gain. Crude oil and all six industrial metals on the London Metal Exchange rallied as the U.S. Dollar Index fell as much as 1.2% to an 11-month low. Raw materials typically move inversely to the U.S. currency.

Governments have cut interest rates and boosted spending to fight the worst Depression since World War II, spurring investors to buy bullion as a hedge against the prospect of accelerating inflation and debasement of currencies. Gold, silver and palladium holdings in exchange-traded funds have reached records.

“The market thinks inflation is coming,” Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois, said by telephone. He has been trading gold for more than 30 years. “With interest rates so low, money is chasing money and the dollar is getting murdered.”