Gold in New York climbed above $600 an ounce for the first time in 25 years as investors bet metals will fetch better returns than stocks and bonds.

Gold has surged more than $100, or about 20%, since the end of November, beating the 5% gain in the Standard & Poor’s 500 Index. U.S. corporate bonds earned less than 1%.

Investments in index-linked commodity funds will rise 38% this year to $140 billion, according to Barclays Capital.

“Commodities are the flavor of the month,” the head of foreign exchange and bullion at Natexis Commodity Markets in London, David Gornall, said. “Gold, silver, zinc, or copper, it doesn’t really matter, as long as it’s a commodity.”

Gold for June delivery rose $7.20, or 1.2%, to $599.70 an ounce on the Comex division of the New York Mercantile Exchange.

Prices earlier reached $601.90, the highest since January 1981.

Funds are betting commodities will keep outperforming assets such as stocks and bonds. Copper, zinc, and silver also have gained this year, along with agricultural commodities including sugar.

Copper has climbed 30% in 2006. Zinc has jumped 47%. Sugar has advanced 21%.

“You’re bringing a new segment into the market that was never there,” said Michael Guido, director of hedge fund marketing and commodity strategy for Societe Generale SA in New York. “A lot of investor money is pouring into gold and commodities. It’s become a valid asset class.”

Gold may attract investors as worldwide interest rates remain too low to contain inflation, analysts said. Oil prices rose to a two-month high yesterday.

“The market perceives an inflation risk, although it hasn’t shown up in some of the government statistics,” a portfolio manager of Permanent Portfolio Fund in San Francisco, Michael Cuggino, said. “Low to negative real interest rates after inflation are generally bullish for gold.”

Uncertainty over rate increases in America, Japan, and Europe has depleted confidence in currencies and enticed investors to accumulate gold, analysts said.

The European Central Bank left its main rate at 2.5% yesterday. The U.S. benchmark rate is at 4.75% after 15 straight increases. Japan’s rate remains close to zero. Gold gained in all currencies last year, paced by a 36% surge in metal sold in euros and yen. Gold priced in yen has climbed 16% this year.

The precious metal sold in euros has gained 12%.

“Gold is benefiting on the backs of the dollar, the euro, and the yen,” the president of Fleckenstein Capital in Seattle, William Fleckenstein, said. “Even if you like one, it’s just the lesser of evils. The move in gold has been against all currencies.”

He said he began buying gold around $300 and last purchased futures around $550.