Gold rose to the highest since 1980 as record energy costs and a weakening dollar boosted the appeal of the precious metal as a hedge against inflation. Silver also gained.

Some investors buy gold when fuel expenses climb to hedge against accelerating consumer prices. Crude-oil futures rose to a record $85.48 a barrel today as tensions mounted between Turkey and Iraq, which has the world's third-largest petroleum reserves. The precious metal reached a record in January 1980 after oil doubled in a year.

"Oil is at a record high, and in the face of a slumping dollar, you've got a recipe for gold to shoot higher," said Matt Zeman, metals trader at LaSalle Futures Group Inc. in Chicago.

Gold futures for December delivery rose $10.20, or 1.4 percent, to $764 an ounce at 12:40 a.m. on the Comex division of the New York Mercantile Exchange. The metal earlier reached $765.40, the highest for a most-active contract since Jan. 22, 1980, the day after the price reached a record $873.

Silver futures for December delivery rose 6.2 cents, or 0.5 percent, to $13.965 an ounce. Before today, the metal gained 7.5 percent this year.

Gold is up 20 percent this year, heading for the seventh straight annual gain, as the dollar dropped to an all-time low against the euro. Five of the past six bear markets in the dollar have resulted in a higher gold price.