Palm | Kelapa Sawit

Gold is poised for its biggest monthly advance since November 2009 as a weakening dollar and accelerating inflation prompted investors to buy precious metals as a store of value.

Immediate-delivery gold was little changed at $1,534.72 an ounce at 10:25 a.m. in Singapore after touching a record $1,540.85 an ounce earlier. The metal surged 6.8 percent this month. Bullion for June delivery in New York rose 0.2 percent to $1,534.80 an ounce, nearing yesterday’s record of $1,538.80.

“The sinking dollar is driving people to the gold market as speculators betting on a further rally are adding more fuel to the fire,” said Lim Han Jo, a Seoul-based trader with Tongyang Futures Co. “I don’t exclude the possibility of gold hitting $1,800 this year.”

The dollar fell to the lowest since December 2009 against the euro yesterday after the Federal Reserve kept borrowing costs at a record low. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, have expanded 1.5 percent this month, heading for the biggest gain since August.

The U.S. economy slowed more than forecast in the first quarter as government spending declined by the most since 1983 and household purchases cooled. Fed Chairman Ben S. Bernanke said this week the bank would maintain record monetary stimulus after ending large-scale bond purchases in June to spur growth.

Eighteen of 21 traders, investors and analysts surveyed by Bloomberg, or 86 percent, said bullion will rise next week. Three predicted lower prices.

‘Influencing Gold’

Gold has gained 8 percent this year, extending a decade- long advance, the best run since at least 1920, as the prospect of currency debasement and accelerating inflation fuel investor demand. Fighting in Libya and sovereign-debt turmoil in Europe have also contributed to the rally this year.

“Going forward, the direction of the dollar is still one of the main factors influencing gold,” said Ong Yi Ling, Singapore-based analyst with Phillip Futures Pte Ltd. “Dollar weakness may continue as the Fed is likely to err on the side of caution rather than tighten too early.”

Cash silver jumped 29 percent this month, the most since 1987, climbing to a record $49.79 on April 25. Silver last traded at $48.4575. Palladium gained 0.6 percent to $781.25, a 2.3 percent gain this month, while platinum was little changed at $1,843.75, a 4.3 percent advance for April.