Gold prices rose to a 25-year high on inflation concern as crude oil prices gained after rebel attacks in Nigeria reduced output.
Investor demand pushed platinum and copper to records, and silver to 21-year highs. Metals have outperformed stocks and bonds, prompting speculators to diversify their investments. Gold rose 18 percent last year, while the Standard and Poor's 500 Index of stocks rose 3 percent. US notes and bonds returned 2.8 percent, according to Merrill Lynch & Co.
"There's definitely more buying in gold, obviously on inflationary fears," Darren Heathcote, head of trading at N.M. Rothschild and Sons (Australia) Ltd, said from Sydney. "The funds have continued to buy."
Gold for immediate delivery rose as much as US$2.10, or 0.4 percent, to US$564.30 an ounce, the highest since Jan. 21, 1981.
The metal traded at US$559.20 at 3:10pm in Singapore.
Crude oil prices rose after pipeline sabotage cut output in Nigeria, Africa's biggest oil producer, and on concern over Iran's nuclear program. The US and UK are among nations that may seek to refer Iran to the UN Security Council, a move that could lead to sanctions. The two exporters make up 7.5 percent of global oil supply.
Speculative funds are buying gold to hedge against "geopolitical risks," Kazuhiko Saito, a commodity strategist at Interes Capital Management in Tokyo, said by phone yesterday.
Hedge funds and other large speculators have more than tripled net long positions, or bets prices will rise, on the Comex division of the New York Mercantile Exchange in the last six months, US Commodity Futures Trading Commission data show.
Copper futures in Shanghai rose to a record for the second day on speculation demand from cable and wire makers will outpace supply in China, the biggest consumer of the metal.
The metal has been buoyed by interest from pension and hedge funds. Funds are investing in commodities through indexes, including the Goldman Sachs Commodity Index. That may increase demand for copper futures by an amount equal to 244,40 tonnes a year this year and next, according to Peter Hollands, managing director of Bloomsbury Minerals Economics Ltd in London.
Gold prices have risen 33 percent in the past year, platinum 22 percent, silver 40 percent and Shanghai copper futures 53 percent.
Prices of gold fell after reaching a 25-year high yesterday as speculators judged the gains overdone and locked in profits.
"It's had such a strong run," Mark Pervan, head of resources and mining research at Daiwa Securities SMBC, said by phone from Melbourne. "There's a lot of short-term money in the market that probably wants to take a profit, like hedge funds."
Gold for delivery next month traded at US$559.10 an ounce, up 0.4 percent on the Comex division of the New York Mercantile Exchange. It reached US$565.50 an ounce earlier yesterday, the highest since Jan. 22, 1981.
In Tokyo, gold for delivery in December rose ?11 (US$0.09), or 0.5 percent, to settle at ?2,101 a gram, or ?65,341 an ounce, the highest closing price since Dec. 9.