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Gold prices climb to new all-time record over $875 an ounce on rising oil prices
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    NEW YORK — Gold futures surged to an all-time high above $880 an ounce Tuesday as traders bet that rebounding oil prices would boost demand for the metal as a safe haven investment.
    An ounce of gold for February delivery climbed as high as $880.40 an ounce on the New York Mercantile Exchange, easily breaking its previous record of $875 set in 1980. Spot gold also rose to a fresh high, hitting $876 an ounce to beat the high of $869.05 it hit last week.
    Still, when adjusted for inflation, gold remains well below its all-time high. An ounce of gold at $875 in 1980 would be worth $2,115 to $2,200 today.
    Gold has soared during the past year, boosted by rising prices for oil and other commodities and also by the falling U.S. dollar. Those trends have increased the metal’s appeal as a hedge against inflation; gold is also seen as a safe investment in times of political and economic uncertainty around the world.
    Hedge and pension funds, along with other long-term investors, also flocked to gold as the subprime mortgage crisis in the U.S. intensified. Driving the push to Tuesday’s fresh record was a stream of discouraging news, including comments Monday by Treasury Secretary Henry Paulson that a correction in the housing market is ‘‘inevitable and necessary.’’
    Also weighing on investors’ was word that Bear Stearns Chief Executive James Cayne was resigning under pressure from shareholders upset over the firm’s losses.
    But analysts weren’t predicting a relentless march higher for gold; they said a corrective sell-off could follow its spike higher.
    ‘‘Gold traders see some resistance near $880 and $890 and are probably mindful of the large number of long positions in the market but that is not stopping them from trying to test the highly rarefied air found at these levels,’’ Jon Nadler, senior analyst at Kitco Bullion Dealers, wrote in a note.
    As fund investors pour money into the market, however, demand from the retail sector and individuals — who drove gold to its previous record almost three decades ago — is weaker.
    ‘‘They’re not, apparently, lining up around the block like they did in January 1980,’’ Nadler said. ‘‘I don’t know how much longer the funds are going to see rewards.’’
    Gold ended 2007 up almost 32 percent. The recent surge in oil prices to $100 a barrel has helped boost the price of the metal.
    Light, sweet crude for February delivery rose $1.91 to $97 a barrel Tuesday on the New York Mercantile Exchange.
    Another major driver behind gold’s advance from less than $650 an ounce in January has been the dollar’s precipitous drop against the euro. A cheap dollar can make commodities more attractive as an alternative investment, and can also raise demand from foreign buyers as their currencies gain strength.
    The dollar fell against the euro Tuesday. The 15-nation currency bought $1.4729 in afternoon trading in Europe, up from $1.4696 late Monday in New York.
    Growing demand for gold jewelry in India and China has also contributed to increasing prices over the past several years.
    The sharp run-up in precious metals — an ounce of gold cost $680 in mid-August — has made jewelry more expensive over the past few months. March silver rose 32.5 cents to $15.615 an ounce Tuesday.

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