The price of gold surged to a new 28-year high yesterday and other commodities followed its upward trajectory amid further dollar weakness, resurgent oil prices and power outages at two key African platinum smelters.
Gold has rallied by more than $100 since mid-August, and yesterday the precious metal climbed a further $7.20 to hit a high of $749 per ounce, before settling back at $748.80, as the dollar continued its losing streak against the euro and the yen.
One euro yesterday bought $1.4226, compared with $1.4164 the previous day.
The US currency remained weighed down by expectations that the Federal Reserve will cut interest rates again after it slashed the cost of borrowing by 50 basis points in September.
Investors often buy gold as a protection against economic trouble, political turmoil and sometimes also as an inflation hedge.
Dealers and analysts yesterday said that fund buyers, seeking safe havens for their cash amid the continuing unease in the global credit markets, may yet push the price of gold above the $800 mark.
James Moore, an analyst at TheBullionDesk.com, said: "We still expect gold to challenge the $800-per-ounce level before year-end as investors continue factoring safe-haven assets into their portfolios, with an initial target of $765."
Meanwhile, South Africa's gold companies are looking to plumb deeper veins in a new gold rush spurred by the record prices.
The deeper mines run, the richer the ore being uncovered. The price in danger includes rockfalls, poisonous gas explosions, flooding and earthquakes. However, Gold Fields, South Africa's second-biggest producer after AngloGold Ashanti, is ready to set a new record, digging more than 4120 metres at its Driefontein mine.
Analysts said the dollar's weakness benefited bullion as a lacklustre US currency makes gold and other dollar-priced metals cheaper for non-US investors.
Gold was also reaping benefits from rising oil prices as a hedge against oil-led inflation.
US crude passed the $83-a -barrel level after the US government reported an unexpected decline in crude oil inventories.
At the same time, platinum charged to a record intraday high of $1402 an ounce after two smelters at Anglo Platinum, the world's biggest producer of the precious metal, were hit by major power outages in South Africa, which in turn triggered supply concerns.
Platinum prices have already been pushed higher in recent weeks by production cuts linked to strike action at Lonmin.
The power cuts, which have affected South Africa since Monday, were apparently caused by maintenance on the country's ailing power network, and may continue into next week.
South African power problems also hit BHP Billiton's aluminium smelting operation, also triggering supply concern over the metal and sending shares in the company up 4.4%.
Metals prices at historical highs supported mining shares across the board, with Antofagasta up 4.2% and Xstrata up 3.9%.
Meanwhile, lead hit $3890 per tonne on the London Metal Exchange yesterday, supported by a tight supply outlook combined with strong demand from battery makers, analysts said. It ended the day's trading at $3835 per tonne.
The metal has outperformed other LME contracts, and indeed most other assets, with gains of 130% since the start of the year.
Despite these high prices, users of the metal have little choice but to continue buying, analysts said.
"There is a fair way to go before they will even look at making a change," said David Thurtell, an analyst at BNP Paribas.
Copper, which is often seen as a benchmark of the metals market, was yesterday quoted at $8160 per tonne, down $40 from Wednesday's final open outcry session, but up more than 25% since the start of the year.
Silver also climbed to 673.16p in afternoon trading, compared with 670.53p the day before.
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