Global spot gold prices have, for the first time, exceeded $US1500 ($NZ1884) an ounce, as inflation in Asia and the magnitude of the United States Government debt continues to worry investors.
While global equities markets have largely regained the more than 1% losses earlier in the week, the volatility of oil, sovereign debt issues and global inflation continue to unsettle markets.
Spot gold hit the new high of $US1505.40 an ounce, while gold futures contracts in the US for June delivery rose $US8.20 an ounce to $US1503.30.
Gold first hit $US1000 in February 2009 and slowly rose to $US1400 by November last year. During the past five weeks it has continually posted new highs before breaching the $US1500 mark on Wednesday, then holding steady during Thursday.
Craigs Investment Partners has in the past cautioned on the likelihood of gold volatility, but its research had forecast gold rising to $US1475 by the end of this year, and to $US1600 by the end of 2012.
Forsyth Barr broker Suzanne Kinnaird highlighted gold tended to perform strongly when the US dollar was weakened, as happened this week when finance rating agency Standard & Poor's (S&P) downgraded its US debt outlook, which underpinned the move through $US1500.
"World uncertainty contributes to the strength in gold, which is seen as a safe haven investment by some," Ms Kinnaird said.
Forsyth Barr is forecasting gold at $US1650 by April next year.
Oil prices also recovered, with UK Brent up to $US122 a barrel and West Texas up slightly to $US108; rising towards the multi-year highs hit earlier this year as unrest in the Middle East and North Africa sparked fears of a supply outage, Reuters reported.
Higher oil prices tend to benefit gold, as they can boost commodities as an asset class and lift interest in gold as a hedge against oil-led inflation.
Silver tracked gold and also rose higher, extending a stellar performance that has seen the grey metal outperform other precious metals this year. Silver hit a 31-year high at $US44.79 an ounce and was later bid at $US44.73 against $US43.89.
Gold prices are up 5% in April and look set to extend gains as the metal's appeal as a haven from risk was boosted by talk that Greece may have to restructure its debt and S&P's threat to downgrade America's triple-A credit rating.
"Gold has been acting as a currency in its own right, and that is why we are up at $US1500," Simon Weeks, head of precious metals at the Bank of Nova Scotia, said.
