Gold jumps over $20 on falling dollar, crude spike

Other commodities also traded higher as part of a broad rally in futures markets, with silver, copper, corn and soybeans all gaining sharply.

The dollar fell Thursday amid concerns over a possible government bailout of mortgage finance companies Freddie Mac and Fannie Mae. The 15-nation euro rose to $1.49 in morning trading in New York from $1.4768 late Wednesday.

Gold for December delivery jumped $22.70 to settle at $839 an ounce on the New York Mercantile Exchange.

Other precious metals also moved higher. December silver added 69 cents to settle at $13.843 an ounce on the Nymex, while September copper gained 14.3 cents to settle at $3.5385 a pound.

Jon Nadler, analyst with Kitco Bullion Dealers Montreal, said crude's surge and the dollar's fall "made the battered commodity complex an attractive parking place for money for the moment."

A falling dollar encourages investors to buy precious metals like gold as a safe haven against inflation and weakness in the U.S. currency. A weaker greenback also makes dollar-denominated commodities like gold cheaper to overseas buyers.

Crude jumped back above $121 a barrel after the dollar fell and traders grew nervous that tensions with Russia could threaten Western oil shipments.

Light, sweet crude for October delivery jumped $5.62 to settle at $121.18 a barrel on the Nymex after earlier rising as high as $122.04, crude's highest trading level since Aug. 4. Crude prices have settled higher for three straight sessions.

In other Nymex trading, heating oil futures rose 13.71 cents to settle at $3.3006 a gallon, while gasoline prices gained 13.49 cents to settle at $3.0452 a gallon.