Gold futures surges as dollar falls; oil hits $115

Other commodities traded mostly higher, with crude oil rising to a trading record above $115 and wheat prices also gaining.

U.S. homebuilders began work on 947,000 homes in March an 11 percent drop from February and the lowest amount since 1991, the Commerce Department said Wednesday. The data helped pushed the dollar to a record low against the euro, which traded at $1.5955, up from $1.5790 late Tuesday in New York.

"The driving factor in the gold market is almost record-low housing starts. ... It undermined the dollar and also triggered further safe-haven buying into gold," said James Steel, analyst with HSBC in New York.

A weak dollar encourages investors to shift funds into hard assets like gold and silver, which are known for holding their value. A falling greenback also makes dollar-denominated commodities appear cheaper to overseas investors.

Gold for June delivery added $16.30 to settle at $948.30 an ounce on the New York Mercantile Exchange, after earlier rising as high as $952.70 its highest level in two weeks.

Gold has gained 10 percent this year and 31 percent in 2007, driven by a falling dollar, soaring crude prices and nervousness about the U.S. economy. The metal has fallen from its record above $1,000 reached in March, but analysts say gold could resume its climb if the Federal Reserve continues its interest-rate cutting campaign as expected.

"Gold is in a bit of a range but by no means would I say it has hit a lull," Steel said.

Other precious metals also rose Wednesday. Silver for May delivery rose 47.5 cents to settle at $18.325 an ounce on the Nymex, while May copper added 9.9 cents to settle at $3.958 a pound.

In energy futures, crude rose above $115 for the first time on concerns about tight gas supplies heading into the summer. The Energy Department's Energy Information Administration said gas inventories fell by 5.5 million barrels last week, much more than forecast by analysts surveyed by Dow Jones Newswires.