NEW YORK (MarketWatch) -- Gold futures closed with gains after soaring to a new record high of $958.40 an ounce Thursday, boosted by weakness in the U.S. dollar and the metal's appeal as a hedge against inflation.

Gold for April delivery rose $11.40 to end at $949.20 an ounce on the New York Mercantile Exchange. Earlier in the session, gold surged to a new record high of $958.40 an ounce.

April platinum futures also hit a record, climbing as high as $2,194.80 an ounce. Platinum finished up $49.40 at $2,188.20 an ounce.

"Gold has surged on increasing inflation concerns with yesterday's stronger-than-expected and sharply higher U.S. CPI report," said Mark O'Byrne, executive director at Gold & Silver Investments Ltd., in a note.

With the commodities complex continuing to surge, "inflation will continue to increase significantly in the U.S. and internationally," he said.

Gold, typically regarded as an inflation hedge, gained Wednesday after the Labor Department reported that U.S. consumer prices rose a seasonally adjusted 0.4% in January. Inflation was stoked by large increases in energy and food prices but also showed increases in a host of underlying core prices. See related story.

The European Commission, the executive branch of the European Union, on Thursday hiked its inflation estimate for the euro zone in 2008 to 2.6%, up from the previous estimate of 2.1%, according to media reports. The Commission also expects economic growth in the EU to be 2% this year, down from its previous estimate of 2.4%.

Earlier this week, Chinese officials said their country's inflation rate climbed to its highest level in more than 11 years in January. The nation's consumer price index climbed 7.1% in January from a year earlier, accelerating from a 6.5% rise in December.

"This type of inflation environment is one in which commodities thrive in -- at least until growth rates start to falter," said Edward Meir, an analyst at MF Global, in a research note.

"In this respect, however, although the American and European economies are slowing markedly, we are not seeing signs of a synchronized global slowdown just yet in the Asian economies," Meir said. "What's more, and somewhat abruptly, there has been a supply squeeze coming through in some of the metals."

Dollar sinks

Gold also received a boost from weakness in the U.S. dollar. The dollar index, which tracks the performance of the greenback against a basket of currencies, fell 0.7% to 75.56. See Currencies.

The greenback was pressured by worse-than-expected manufacturing in the Philadelphia region as reported by the Federal Reserve Bank of Philadelphia. Read more.

Adding to bad economic news, the Conference Board said Thursday that the index of leading U.S. economic indicators dipped by 0.1% in January, as weaker stock prices and housing data drove the gauge to a fourth consecutive monthly decline. See Economic Report.

Crude-oil futures dropped Thursday, after rallying to a new record high in the previous session, as government data showed U.S. crude inventories rose more than expected in the latest week. See Futures Movers.

Platinum futures soared to a new record high of $2,194.80 an ounce Thursday, surpassing their previous record of $2,174 set on Tuesday. The platinum rally has been propelled by concerns about declining output from South Africa, the world's biggest platinum producer.

South Africa has been saddled with severe power shortages since mid-January, forcing many major mining companies to operate below capacity and revise their production forecasts accordingly.

Wednesday's correction in platinum "reflects the metal's high volatility and extremely overbought conditions," said James Moore, an analyst at TheBullionDesk.com, in a note.

"However, the dip again served as a bargain-hunting opportunity, as ongoing supply woes in South Africa look set to see the metal move into a much deeper deficit this year and could potentially see price extend to $3,000 an ounce," Moore said.

Also on Nymex, March palladium surged $21.30 to end at $515.50 an ounce.

March silver gained 19 cents to finish at $17.95 an ounce and March copper rose 10 cents at $3.81 a pound.

The Amex Gold Bugs Index HUI, edged down 0.1% to 465.80 points.

As for the sector's exchange-traded funds, the StreetTracks Gold Trust ETF GLD, +0.84% was flat at $93.25, the iShares Silver Trust ETF SLV, +2.18% edged down 0.02% to $176.96 and the Market Vectors-Gold Miners ETF GDX, +1.28% dropped 0.3% to $50.79.

Gold warehouse inventories were unchanged at 7.6 million troy ounces as of late Wednesday, according to Nymex data. Silver stockpiles were also unchanged at 133.9 million troy ounces, while copper supplies stood at 13,978 short tons, unchanged.