Gold increased in value this morning, extending a seven-year rally to the highest price since 1980, as a declining dollar and elevated energy costs heighten demand for a hedge against inflation, Bloomberg reported.

The metal rose 31 percent in 2007 as the dollar fell to an all-time low against the euro and crude oil prices soared to their highest level ever. Oil traded as high as $98.29 a barrel today, $1 below its record.

Gold futures for February delivery climbed as high as $848.65 this morning on the Comex division of the New York Mercantile Exchange. The record price was set on Jan. 21, 1980, when futures reached $873.

“Gold is leading us into uncharted territory,” said Frank McGhee, head metals trader at Integrated Brokerage Services LLC in Chicago. “Crude is making a run for $100, the dollar is headed lower, and geopolitical tensions are building. It’s very possible gold can get to $1,000 this year.”

Silver also gained, increasing 17.5 cents, or 1.2 percent, to $15.095 an ounce for March delivery. Last year, silver rose 15 percent.