Gold prices surged above $900 a troy ounce for the first time ever as investors yesterday sought refuge from a weakening US dollar amid alarm bells about further losses on Wall Street.

As the spot price hit $914 an ounce in London yesterday, traders were betting it would reach $1,000 within three months. The surge to a record high was also prompted by fears that lower interest rates and higher food and energy commodity prices would trigger a rise in inflation.