Gold raced to a record high above $1,140 an ounce on Monday, gaining 2 percent as a weakened dollar boosted funds' risk appetite for investments across the board.
Gains in gold spurred interest in other precious metals, with platinum, palladium, silver and rhodium all hitting their strongest levels in more than a year, largely driven by a tumbling dollar.
A weak dollar has increased the demand of risky assets of all kinds, including hard assets. It is clearly reinforcing the commodities bull market, said James Steel, chief commodities analyst at HSBC.
In this atmosphere, it is almost impossible for gold to resist appreciating along with everything else, Steel said.
Year to date, gold has risen 30 percent, outperforming the broad-based equities S&P 500 index, which has gained 23 percent over the same period.
Gold's ascent was driven by a combination of dollar weakness, inflation worries and doubts about a nascent economic recovery, analysts said.
Spot gold reached a record $1,143.25 an ounce, and was at $1,142.70 an ounce at 2:12 p.m. EST (1912 GMT), against $1,118.50 late in New York on Friday.
U.S. December gold futures settled up $22.50, or 2 percent, at $1,139.20 an ounce on COMEX division of NYMEX.
Gold's gains were momentarily capped as the dollar managed a brief rally off lows after U.S. Federal Reserve Chairman Ben Bernanke said the Fed was attentive to changes in the currency. But as investors digested his comments, they decided there were no signals of change to monetary policy.
Rising equity markets also boosted the appeal of assets seen as higher risk, such as commodities and higher-yielding currencies. U.S. stocks rose almost 2 percent. <.N>
Other commodities also rallied, with the Reuters/Jefferies CRB index up nearly 3 percent, as oil rose more than $2 toward $80 a barrel, while base metals such as zinc and copper also climbed.
Gold now looks poised for further gains, analysts said, with a number of call options, or rights to buy, being placed at elevated levels on U.S. December gold futures.
There is no reason why over the next few days it can't have a push toward that $1,200 mark before we get to the December expiry for the options positions, which everyone's looking at, said Tom Kendall, precious metals strategist at Mitsubishi Corp.
There is a large bunch of $1,200 calls December expiry, which are acting as a bit of a magnet for prices at the moment.
Gold's gains lifted other precious metals, with silver reaching its highest since July last year at $18.43. Platinum hit $1,451.50 an ounce, its highest since September 2008 and palladium reached its strongest level in 15 months at $375.50.
Later, platinum was at $1,444.50 an ounce against $1,390, while palladium was at $374 against $353.50. Rhodium hit a 13-month high at $2,375.
Silver was at $18.41 an ounce against $17.41.
(Reporting by Frank Tang and Jan Harvey; Editing by Marguerita Choy)