Gold hits new record high at $1,070 per ounce

Gold hit a record near $1,070 an ounce and oil rose to a 2009 peak above $75 a barrel as the dollar slipped to its weakest in more than a year on Wednesday.

Expectations of low interest rates knocked the dollar to a 14-month low against a basket of currencies, boosting gold's appeal as an alternative investment and making commodities cheaper for non-dollar buyers.

The economic picture is also supportive, with Asian stocks hitting their highest since early August after strong results overnight from technology bellwether Intel and stronger-than-expected Chinese trade numbers.

Chinese copper imports in particular were a surprise, jumping 23 per cent against an expected fall, pushing London copper futures up 2 per cent.

Oil surged for a fifth day to hit an intraday high of $75.13 a barrel in a rally also driven by optimism over a global economic rebound and the China trade data, which highlighted a recovery in the world's second-largest oil user.

"I think the picture of China's oil demand being firm hasn't changed. But at the moment, the US dollar is a clear driver of commodities," said David Moore, commodities strategist at Commonwealth Bank of Australia in Sydney.

"I've been thinking the gold price has already run up and so it has a limited upside but it's still obviously drawing support from the softer US dollar."

Gold added $5.35 an ounce at $1,068.55 an ounce after hitting an intraday high of $1,070.40, surpassing a previous record of $1,068.30 hit on Tuesday as fund buying gained in pace. Bullion has gained more than 21 per cent in 2009.

"We are above $1,060s and we would be looking towards the $1,070-80s now. It's really difficult to pick a top," said Adrian Koh, analyst at Phillip Futures in Singapore.

"Until we get any strong change in fundamentals for the dollar, then it may continue to weaken further and everyone will flock to gold as a hedge."

LME copper rose 2 per cent to $6,260 a tonne after China's imports of unwrought copper and semi-finished copper products rose 23 percent to 399,052 tonnes in September, much more than the 300,000 tonnes analysts had expected.

"The import volumes are much larger than our expectations, which I believe represents market demand, especially supported by the increase of scrap copper imports," Li Ye, analyst at Star Futures, said. "This could be good news for the current weak market."

The benchmark rubber contract on the Tokyo Commodity Exchange jumped to a one-year peak at ¥219.6 per kilogram ($2.46) on the high price for oil, the feedstock for synthetic rubber.

A weaker dollar offset bearish trade data from China that showed a 12 per cent slump in imports of soybeans in September.

"I'm not sure if you can read too much into the drop in China's imports as it may be seasonal. People tend to only buy what they need until the next harvest comes along," said Brett Cooper, a trader at MF Global Australia.

China's imports fell for a third month after touching a record 4.7 million tonnes in June as Beijing wound down its biggest ever strategic inventory build-up, a factor that is expected to yet cut October arrivals even further.