Gold prices breached $1,200 an ounce on Tuesday, rallying as the dollar fell further against other currencies.
The decline in the dollar pushed other metals to their highest levels in more than a year. Energy futures also rose.
Following a well-established trend, investors sold the dollar and other safe havens like Treasurys and piled into stocks and commodities. Demand for riskier assets increased as fears over a possible debt crisis in the Middle Eastern city-state of Dubai eased and investors got more good news on the economic recovery in the U.S.
On the New York Mercantile Exchange, gold for February delivery jumped to a new record of $1,204 an ounce before settling at $1,200.20 an ounce, up $17.90, or 1.5 percent, from Monday's close.
Gold, which is seen as a hedge against inflation and a weak dollar, has been a key beneficiary of the dollar's relentless decline against other currencies since early this year. Gold briefly dipped below $700 in November of last year at the height of the financial crisis, when investors were dumping stocks and commodities across the board, and has been on a mainly upward trend ever since.
The dollar has weakened steadily this year as record-low U.S. interest rates encourage investors to hold assets other than cash. A weaker greenback also makes commodities, which are priced in dollars, more attractive to investors overseas.
The ICE Futures US dollar index, a popular gauge of the dollar's performance, fell 0.5 percent Tuesday. Major stock indexes, meanwhile, soared more than 1 percent, including the Dow Jones industrial average, which jumped 126 points to its highest close of the year.
Among the day's data, the Institute for Supply Management said new manufacturing activity grew at a slower pace in November, but new orders rose, an encouraging sign that a pickup could materialize in the coming months. The National Association of Realtors said its index of sales agreements rose in October to the highest level since March 2006. A separate report said construction spending ticked up, another good sign for the housing market.
Elsewhere on the Nymex, March silver surged 68.5 cents, or 3.7 percent, to $19.21 an ounce. Earlier, silver rose to $19.30, its highest level since March 2008. Copper futures rose to $3.238, their highest since September 2008, before settling up 5.4 cents at $3.231 a pound.
December platinum rose $26.20 to $1,485.70 an ounce. Palladium rose 5 percent.
Oil prices also got a boost from the weaker dollar, as well as a report showing manufacturing activity in China grew for the ninth straight month. That stirred hopes that Chinese energy demand could pick up.
Light, sweet crude for January delivery rose $1.09 to settle at $78.37.
Heating oil rose 3.01 cents to $2.078 a gallon, while gasoline gained 3.08 cents to $2.0423 a gallon.
Grain prices fell slightly on the Chicago Board of Trade. March wheat futures slid 4.75 cents to $5.84 a bushel, while corn for March delivery shed 3 cents to $4.145 a bushel.
January soybeans dipped 1 cent to $10.595 a bushel.
December coffee added 0.75 cent to $1.425 a pound, while December cocoa jumped $101 to $3,315 a ton.