Gold prices shot above 1,300 dollars for the first time and silver nailed a 30-year high this week as traders exited the US currency for safe-haven investments on worries about fragile economic recovery.
Gold and silver rallied as investment demand propelled precious metals higher.
Gold prices struck a record-high 1,300.07 dollars an ounce on the London Bullion Market, helping to drag sister metal silver to 21.44 dollars an ounce -- its highest level since October 1980.
"The underlying bullish trend in the gold market continues to be fuelled by the high level of uncertainty regarding the United States and European economies," said SEB Commodity Research analyst Filip Petersson.
"Wealth preservation are the keywords.
"As long as we do not see a reduction in the uncertainty regarding the long-term economic outlook, gold prices will remain well-supported as the currency of choice for risk-averse investors."
He added that "the strategic view remains bullish (positive) and we expect prices above 1,350 dollars per ounce before the end of the year."
Gold and silver were also driven by keen demand from exchange traded funds (ETFs).
ETFs allow traders to invest money more easily in commodities, without trading on the futures market. They are traded like shares and are widely regarded as an inexpensive and low-risk way of investing.
"We now expect gold prices to stay high for several more years," said Julian Jessop, chief international economist at Capital Economics consultancy.
"Fears of runaway inflation or a dollar collapse, which underpin some of the most bullish forecasts for gold, remain exaggerated. Nonetheless, prices should continue to be supported by strong demand for a safe haven from other potential economic and financial shocks."
Gold also won support from the weakening US currency, which makes the dollar-priced metal cheaper for buyers using stronger currencies and so tends to stimulate demand and prices.
The European single currency rose against the dollar Friday after a surprise gain in German business confidence.
Gold gained additional support this week after the US Federal Reserve hinted at more stimulus spending if the tepid US economic recovery cools further, sending the dollar reeling.
Gold and silver prices have soared by about 30 per cent over the past year.
By late Friday on the London Bullion Market, gold rallied to 1,297.00 dollars an ounce from 1,274.00 dollars a week earlier.
Silver advanced to 21.35 dollars an ounce from 20.85 dollars.
On the London Platinum and Palladium Market, platinum jumped to 1,645 dollars an ounce from 1,618 dollars.
Palladium rose to 562 dollars an ounce from 547 dollars.
Crude oil prices began the week with a bang, surging on Monday as the market followed stocks higher, and buoyed by confirmation that the US recession ended in June 2009.
The United States -- the world's biggest oil consuming nation -- exited recession in June 2009, the National Bureau of Economic Research said, calling the end to the longest downturn in more than half a century.
However, oil hit reverse gear on Tuesday after the US Federal Reserve's monetary policy council warned that "the pace of recovery in output and employment has slowed".
The central bank also said it was prepared to take new stimulus measures if necessary to keep the US economy on track while leaving interest rates at record lows.
That sent the dollar reeling against the euro and the yen.
Crude futures rose early on Wednesday in response to the weaker dollar, but ended the day in the red, after official data showed an unexpected rise in US crude inventories.
The US government's Department of Energy announced that crude stockpiles climbed by one million barrels last week, confounding analysts' expectations for a drop of 1.7 million barrels.
Base or industrial metals mostly rallied on the back of "the weak US dollar", said analysts at Commerzbank.
By late Friday on the London Metal Exchange, copper for delivery in three months jumped to 7,966 dollars a tonne from 7,723 dollars.
Three-month aluminium surged to 2,330 dollars a tonne from 2,181 dollars.
Three-month lead climbed to 2,304 dollars a tonne from 2,220 dollars.
Three-month tin gained to 23,900 dollars a tonne from 23,580 dollars from a week earlier.
Three-month zinc advanced to 2,278 dollars a tonne from 2,172 dollars.
Three-month nickel fell to 23,000 dollars a tonne from 23,275 dollars.
GRAINS AND SOYA
Maize prices hit two-year highs and soya 15-month peaks on tight supplies.
Maize hit 5.2375 dollars a bushel -- the highest level since September 2008 -- before ending lower compared with a week earlier.
By Friday on the Chicago Board of Trade, maize for delivery in December stood at 5.10 dollars a bushel from 5.13 dollars the previous week.
November-dated soyabean meal -- used in animal feed -- rose to 11.15 dollars a bushel from 10.69 dollars a week earlier.
Wheat for December fell to 7.03 dollars a bushel from 7.39 dollars.
Coffee futures diverged.
By Friday on the New York Board of Trade (NYBOT), Arabica for delivery in December fell to 179.15 cents a pound from 190.75 cents the previous week.
On LIFFE -- London's futures exchange -- Robusta for November rose to 1,702 dollars a tonne from 1,660 dollars.
Cocoa prices traded mixed.
By Friday On NYBOT, cocoa for delivery in December climbed to 2,812 dollars a tonne from 2,788 dollars a week earlier.
On LIFFE, cocoa for December fell to 1,882 pounds a tonne from 1,900 pounds.
Sugar futures climbed.
By Friday on NYBOT, the price of unrefined sugar for delivery in October increased to 25.22 US cents a pound from 24.79 cents a week earlier.
On LIFFE, the price of a tonne of white sugar for December grew to 629.50 pounds from 613.10 pounds.
Cotton prices reached above one dollar a pound for the first time in 15 years.
A surge in demand for clothing in the developing world coupled with the devastating floods in Pakistan and a heavy monsoon season in China and India have made cotton a highly sought-after commodity.
"Retails might try to raise prices following the rise in cotton prices, even though the raw material accounts only for a small share of the product's cost," said independent analyst John Flanagan.
By Friday in New York, cotton for December rose to 98.84 cents a pound from 98.79 cents a week earlier.