Commodity markets enjoyed a strong rally this week after the Federal Reserve aggressively stepped up its efforts to counter the financial crisis by announcing plans to buy $300bn in US Treasuries.
However, the Fed's move also led to renewed concerns about the outlook for the dollar and inflation, pushing gold higher.
Gold rose 2.9 per cent to $954 a troy ounce over the week, touching a high of $966.70 during Friday's session.
"Plans for further quantitative easing by the US has seen the dollar nosedive," said Suki Cooper, of Barclays. "In that environment, gold will shine."
Barclays has revised its 2009 average price forecast from $920 to $940 after noting that investor inflows into gold exchange-traded funds at 389 tonnes so far in 2009 have already surpassed last year's total of 321.6 tonnes.
Alan Heap, of Citigroup, said the current bull market was reminiscent of the 1930s when deflation and currency devaluations resulted in a revaluation for gold.
Oil prices were mixed yesterday but held above the $50-a-barrel level.
ICE May Brent rose 33 cents to $51 a barrel, gaining 11.1 per cent this week. Nymex April West Texas Intermediate, expiring at the close, lost 11 cents at $51.50 a barrel, up 11.4 per cent this week. May WTI, the benchmark from Monday, dipped 12 cents to $51.92.
Francisco Blanch, a commodity strategist at Banc of America-Merrill Lynch, said sharp interest rate cuts across a broad range of emerging market, coupled with expansive fiscal policies, should help boost energy demand and prices over the next year.
Among the base metals, copper breached the $4,000 a tonne level for the first time in almost four months, hitting $4,075 before slipping to $3,950, up 7.6 per cent this week. Aluminium added 7.6 per cent at $1,460 a tonne.
In Chicago, CBOT May soyabeans jumped 8.2 per cent to $9.48 a bushel this week, amid simmering tensions between the Argentine government and farmers seeking cuts in export taxes.
Soyabeans gains lifted both corn and wheat with CBOT May corn up 2.2 per cent at $3.97 a bushel while CBOT May wheat rose 5.5 per cent to $5.47 a bushel.
