LONDON, April 19: A roaring rally in precious metals continued on Wednesday as a weaker dollar and firmer oil pushed gold and silver to 25- and 23-year highs, respectively.

Platinum also hit a new record high.

It is not any more a price-driven market, it’s a sentiment-driven market, MKS Finance analyst Frederic Panizzutti said, noting that the market had become “over-bullish”.

Precious metals have soared in the past year, with silver gaining 103 per cent, gold 47 per cent and platinum 30 per cent.

The boost has come on inflation worries, political tensions in the Middle East and instability in currency markets, and dealers said there was nothing to suggest the trend could be reversed in the near term.

Further strength in the metals appears likely, said John Reade, analyst at UBS Investment Bank.

Spot gold spiked to $624.75 an ounce, the highest since December 1980, before dropping to $624.20/625.00 by 0954 GMT. It closed in New York at $620.20/621.00 late on Tuesday.

Gold, which has risen 21 per cent this year and doubled in about three years, has outpaced many other assets. The price boom has attracted new money into the market, dealers said.

Safe-haven gold got a boost from oil, which held within sight of its record high above $71 a barrel as dealers feared Iran’s intensifying dispute with the West over its nuclear aims may lead to supply cuts from the world’s leading exporter.

A weaker US dollar, which hit a seven-month low against the euro, was contributing to interest in gold. Silver gathered steam from the rally and on speculation that a proposed exchange-traded fund would boost physical demand.

Spot silver rose to $14.14 an ounce, the highest in 23 years, and was later quoted at $14.13/14.16, compared with $13.91/13.94 in the US market.

Platinum hit a new record at $1,120 an ounce before inching down to $1,119/1,124. It closed in New York at $1,111/1,116 on Tuesday.

In industry news, the world’s third-biggest platinum producer Lonmin Plc said it expected to restart its biggest furnace this week after closing earlier this month due to a leak.

Palladium rose to $368 an ounce, the highest since August 2002, but dropped $1 to $367/371.—Reuters