Gold rose to a fresh record, while copper breached $8,000 a tonne as investors forced the US dollar lower on speculation the Federal Reserve would adopt a second phase of quantitative easing.
Gold climbed as high as $1,313.20 a troy ounce, a fresh record, as some investors sought a safety net from the turbulence of the currency market.
It was widely thought that a number of Asian central banks were active in the foreign exchange markets on Wednesday in attempts to stem the disorderly rise of their currencies.
Their actions only had a limited impact, however, and the dollar continued the latest leg of its rally, which started last week, when the Fed opened the door for a fresh programme of quantitative easing.
The dollar has since moved sharply lower, raising concerns about a round of competitive devaluations of paper currencies – and boosting the appeal of hard assets such as silver and gold.
Edel Tully, precious metals strategist at UBS, said precious metals were benefiting from a surge in investor interest.
“Portfolio managers, in an effort to erode less impressive market returns earlier in the year, are putting money to work in gold, but also silver, platinum and palladium,” she said.
By late morning in London, bullion stood 0.1 per cent higher at $1,308.70 an ounce. Adjusted for inflation, gold prices remain below their peak in 1980.
Silver, meanwhile, extended its 30-year peak, rising 0.5 per cent to $21.80 a troy ounce, while platinum gained 0.9 per cent to $1,647 an ounce, and palladium added 1.6 per cent to $566 an ounce.
Elsewhere, the flood of money into commodity markets pushed base metals higher.
The price of copper on the London Metal Exchange, already higher on the back of tight global supplies, gained 0.7 per cent to hit $8,038 a tonne, a two-year high.
