Gold set an historic high near the magical number of $1,000 on Wednesday and silver jumped to a 27-year peak, as record low dollar and strong oil triggered a fresh wave of bullion buying.
Spot gold rose as high as $990.90 an ounce after slipping to a low of $959.45. It was quoted at $985.90/986.70 at 1703 GMT, against $963.20/964.00 in New York late on Tuesday, when it fell 2 percent with a drop in oil.
"The rally is mainly dollar-driven," said Frederic Panizzutti, precious metals analyst at MKS Finance. "We tried several times on the upside, but each time lost momentum on the back of profit-taking. Taking into consideration that some profits have already been taken, these moves are probably driven by fresh positions.
"We might be more lucky this time in reachingy psychological level of $1,000," he said. The dollar hit a fresh record low against the euro and a basket of currencies on renewed concerns about the health of the US economy.
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 firmed above $103 a barrel and traded just below a liftime high, after Opec left its output unchanged despite US calls for action to reduce prices. "We have to keep an eye on oil and the euro/dollar. As soon as the euro moves up above $1.50, the market sees fresh speculative buying. We have a chance to see the $1,000-an-ounce level," said Michael Kempinski, senior trader at Commerzbank. "Gold still looks very good on charts." The euro was quoted at $1.5282, up from $1.5208 in New York late on Tuesday.
"Longer term, gold is going to go up. The $1,000 level is a strong resistance level and the metal might make one or two attempts before it breaks it," said Walter De Wet, analyst at Standard Bank. Gold's rally also supported silver, which rose as high as $20.82 an ounce and was last at $20.67/20.72, against $19.71/19.76 in New York on Tuesday.
Platinum fell as low as $2,150 before rising to $2,225/2,235 an ounce, against $2,220/2,230 late on Tuesday, when it hit a record of $2,290 on persistent supply fears after a power crisis disrupted mining in top producer South Africa.
"Ongoing supply issues and potential for further mine disruption in South Africa means that platinum prices could see some immunity to more general market weakness," Fairfax investment bank said in a daily market note.
A crippling power crisis forced a shutdown of the crucial mining sector for five days in January and since then mines have been operating with only 90 percent of their usual power, raising fears of massive job losses in the industry.
South Africa power utility Eskom said applications for new power connections for construction projects requiring more than 100 kilo volt-ampere would take up to six months to approve. Palladium fell to a low of $519 an ounce before jumping to $552/557, against $545/550 in New York on Tuesday, when it rose to a 6-1/2-year high of $590.