Gold rose to the highest level near $929 an ounce on Wednesday as surging oil prices and a weakening dollar boosted demand for the metal as a hedge against inflation. Silver also gained.

Gold for June delivery rose $8.40 to close at $928.60 an ounce on the New York Mercantile Exchange. It climbed as high as $931 in the regular trading session. As of Wednesday, the contract has logged a gain of $62.10 since the May 14 close at $866.50.

Gold rose 31 percent last year as oil rallied 57 percent and the euro gained 11 percent against the dollar. The contract hit a record $1,033.90 on March 17.

Crude-oil futures rose to a record $132.91 a barrel today and the euro rose to the highest in more than three weeks against the dollar.

Oil is obviously leading gold and if the historical gold vs. oil ratio ever returns, we could see gold as high as $1,500, said Peter Grandich, editor of the Grandich Letter.

Precious metals rallied after a report showed U.S. stockpiles of crude oil unexpectedly dropped, sending the price to more than $132 in New York for this first time. Crude has doubled in the past year.

Silver prices rose along with gold to close at its highest level since April 17. July silver gained 33 cents, or 1.9 percent, to finish at $18.05 an ounce on the Comex. Silver has advanced 21 percent this year, while gold has climbed 11 percent.

July platinum rose $73.20, or 3.4 percent, to close at $2,221 an ounce, June palladium gained $12.95 to end at $463.20 an ounce and July copper fell 3.55 cents to $3.7445 a pound.