Spot gold jumped to a record high above $1,000 an ounce on Friday as a tumbling dollar and an escalating financial crisis triggered a surge in investment demand looking for safety in hard assets.
Crude oil came within a whisker of all-time peaks, while industrial metals and soft commodities were also strong.
Spot gold rose to a session high of $1007.10 a troy ounce. It was up at $1002.30/1003.00 by 1521 GMT from $991.00/991.80 on Thursday.
The latest spurt of buying came after shares in U.S. investment bank Bear Stearns plunged by 50 percent on news that the bank's liquidity position had deteriorated significantly over the last 24 hours.
Fears that this could be the beginning of another tranche of bad news in the financial sector pushed the dollar to record lows against the euro.
"As long as credit problems persist, primarily in the United States, but elsewhere as well, then we will see this tendency for people to move towards real assets," said Stephen Cohen, managing director at Troika Dialog UK.
Gold is used as a hedge against financial market turbulence. It has risen by more than 50 percent since the credit crisis exploded last August.
"Financial sector firms have been hit hard ... Some are trading below book value," said James Fenkner, a fund manager at Red Star. "It gives you a sense of the negative sentiment."
Worries about rising inflationary pressure this year have also given the precious metal a boost.
LAGS AND LAPSES
A falling dollar makes commodities denominated in the U.S. currency cheaper for holders based outside the United States. This is one of the reasons cited for crude oil's climb to an all-time high of $111 a barrel on Thursday.
Crude has gained despite the growing chances of recession in the United States, the world's largest consumer of oil, and the likelihood of lower demand.
But fund managers believe a major reason behind oil's climb over the last few years has been the realisation that shortages over coming years will be a major feature of the market.
"Many major commodity producers whether it be oil companies considering exploration projects or mining companies considering new mines, have in many cases been slow to assume higher prices are here to stay," Cohen said.
"They have not rushed into new project to increase capacity. There are signs this is changing, but there is a big lag between an investment decision and provision of extra capacity."
Copper rose to $8,545 a tonne, less than $300 from the record high of $8,820 seen last week.
The metal used widely in the power and construction industries was also boosted by falling stocks of the metal in London Metal Exchange warehouses, down by more than 35 percent since the beginning of this year.
"The seeming paradox of rising commodity prices in the midst of an economic slowdown has been a source of concern for many," Goldman Sachs said in a note.
"The fact that the rally continues in the midst of an economic slowdown simply serves to highlight the fact that this bull rally is structural, not cyclical."
Cocoa futures in London rose to a new 5-1/2-year high of 1,567 pounds, reinforced by a dock workers strike in the Ivory coast, the world's top cocoa producer.
London robusta coffee and white sugar futures were firm below their recent 12-1/2-year and 15-month peaks respectively.
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