Gold surged to a record high above $960 on Wednesday as investors piled in, spurred by a plummeting dollar and oil rising above $100 a barrel.
Silver rallied to its loftiest level since November 1980, palladium jumped to a 6-1/2-year high and platinum advanced to trade near last week's record highs before paring gains.
Spot gold rose as high as $964.70 an ounce and was quoted at $959.20/960.00 at 10:04 a.m. EST, against $946.60/947.40 in New York late on Tuesday. It has gained 16 percent this year.
The main driver is the record low U.S. dollar, but apart from that, gold should remain fairly well supported even if the currency retracts, said Walter De Wet, Precious metals analyst at Standard Bank.
There are not many alternatives out there right now. Equities are currently high risk investments and still have negative returns for the year. U.S. Treasury is a traditional safe-haven, but there is also not a lot of value.
And then what you left with is gold. There is room for gold to move higher as there are pretty bullish conditions.
The dollar hovered near record lows as weak data showed orders for long lasting U.S.-made goods fell the most in five months, cementing expectations for further U.S. rate cuts.
A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
Oil steadied above $100 a barrel, stepping back from its record peak, as the market paused for breath.
Investor interest in commodities as a whole remains very strong. There is a lot of talk from pension funds about pumping more money into commodities, said Dan Smith, metals analyst at Standard Chartered Bank
I can't see prices pulling back to a massive extent, even though physical gold demand appears to be softer.
The Reuters-Jefferies CRB Index, which tracks prices of 19 commodity futures, hit a record high. The index has gained almost 8 percent since February 13, powered by a run-up in key commodities such as oil, gold and wheat.
U.S. gold futures for April delivery also hit a record high of $967.70 an ounce before falling to $961.
Investment into exchange-traded funds continued. The latest data showed gold held by New York-listed StreetTRACKS Gold Shares, the world's largest gold-backed ETF, hit a record high of 639.44 tonnes -- a jump of more than 30 percent in the past 12 months.
Despite the increased likelihood of IMF (gold) sales, its seems investors are more concerned with the threat that inflation/recession poses, TheBullionDesk.com said in a note.
And with two of gold's key driving forces -- the dollar and oil -- now into uncharted territory themselves, it seem inevitable that gold will challenge new highs closer to $1,000.
The United States Treasury has reversed its opposition to the sale of a limited portion of the IMF's more than 3,000 tonnes of gold stocks, the world's third-largest holding.
In industry news, South Africa's Harmony Gold said two workers had been killed in an earth tremor at its Elandsrand mine, and that production had been stopped at the section where the incident took place.
Peruvian metals producer Buenaventura said a strike hit its Uchucchacua mine, and a union official said workers at 3 other mines had joined the walkout.
Silver jumped to $19.45 an ounce before falling to $19.25/19.30, against $18.65/18.70 in New York. Platinum rose to $2,166 an ounce before slipping to $2,146/2,154, versus $2,130/2,140. Palladium was at $550/555 after rising to $557 an ounce, against $523/528 in New York.
(Additional reporting by Lewa Pardomuan in Singapore)
(Reporting by Atul Prakash; editing by Chris Johnson)