Gold surges as dollar slips

Gold, little changed in Asia, may rise to a record as signs of a recovery in the global economy weaken the dollar, boosting demand for the metal as a store of value and inflation hedge. Palladium rose to a 14-month high.

Bullion, which usually moves inversely to the dollar, is on course for a ninth annual gain after the dollar dropped 6.3 percent this year against a basket of six currencies. Asian stocks rose yesterday after the Standard & Poor's 500 Index reached a one-year high on speculation corporate profits will improve.

"The main driver is still the US dollar, which continues to show weakness, and we see gold testing higher again," said Darren Heathcote, head of trading at Investec Bank Ltd in Sydney. "As we start to see more evidence of economic recovery, we might see the momentum catalyst push gold higher."