Gold rose to the highest since 1980, approaching $800 an ounce, as crude oil surged to a record and the dollar fell to the lowest ever against the euro, boosting the appeal of the metal as an investment. Silver also gained.

Gold has rallied 24 percent this year, heading for the seventh straight annual gain, as oil surged 52 percent and the dollar dropped 8.5 percent against the euro. Demand in the StreetTracks Gold Trust, an exchange-traded fund backed by bullion, is up 31 percent this year to a record 594 metric tons.

"The Fed is going to drop rates again, but inflation is extremely strong," said Leonard Kaplan, president of Prospector Asset Management in Evanston, Ill. "We have excess liquidity here. Investors are buying gold to hedge against the weak dollar and inflation."

Gold futures for December delivery rose $5.10, or 0.7 percent, to $792.60 an ounce on the Comex division of the New York Mercantile Exchange. The price earlier reached $798.30, the highest for a most-active contract since Jan. 21, 1980, the day gold reached a record $873.

Silver futures for December delivery climbed 15 cents, or 1.1 percent, to $14.43 an ounce. The metal is up 12 percent this year.

The dollar fell to a record $1.4438 against the euro on speculation the Federal Reserve will cut borrowing costs on Oct. 31. The Fed lowered the overnight lending rate 0.5 percentage point to 4.75 percent on Sept. 18, the first cut in four years.

"The momentum in gold is building as the bleak outlook for the dollar becomes more apparent," said James Turk, founder of GoldMoney.com.