Sept. 9 (Bloomberg) -- Gold prices that jumped above $1,000 an ounce this week are signaling that investors are buying metals to hedge against declines in currencies, former Federal Reserve Chairman Alan Greenspan said.

The gains are “strictly a monetary phenomenon,” Greenspan said today at an investment conference in New York. Rising prices of precious metals and other commodities are “an indication of a very early stage of an endeavor to move away from paper currencies,” he said.

The price of gold has jumped 13 percent this year as rising government debt coupled with declines in the dollar spurred demand for the metal as a haven. Silver, platinum and palladium also gained.

“What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment,” Greenspan said.

Yesterday, gold futures for December delivery touched $1,009.70 an ounce on the Comex division of the New York Mercantile Exchange, the highest for a most-active contract since March 18, 2008. The metal touched a record $1,033.90 an ounce on March 17, 2008. As of 9:42 a.m., gold traded at $988.

China, the world’s fastest-growing major economy, will continue to be a “large consumer” of commodities, including energy and metals, Greenspan said.

“China is turning out to be the 900-pound gorilla in the energy and commodity market,” Greenspan said. “The increase in oil consumption in China has been quite extraordinary.”