May 29, 7:17 PM EDT
Gold, other commodities soar as US dollar tumbles

By SARA LEPRO AP Business Writer
NEW YORK (AP)

Commodity prices soared across the board Friday as a sinking dollar stoked fears of inflation. The Reuters/Jefferies CRB index, a widely used measure of the global commodities markets, rose 1.3 percent. The index jumped 13.8 percent in May - the biggest monthly jump since at least 1975, the farthest back data is available on Thomson Reuters."Commodities are definitely in vogue again," said Rob Kurzatkowski, futures analyst with Options Xpress.

Prices for gold, oil and grains moved higher as the dollar sank to its lowest level in months against the euro and the British pound. The dollar has weakened considerably since March as investors move out of cash holdings and into riskier assets like stocks on hopes for an economic recovery. Investors are also worried that the massive amounts of money the government has been pumping into the system could lead to inflation. That has been a boon for commodities like gold and oil. Demand for gold tends to rise when the dollar is weak as investors seek protection against inflation, which can be triggered by a falling greenback. And oil is priced in dollars, so when the U.S. currency falls it becomes cheaper for foreign buyers. ( Learn more at )