The Gold Price hit new all-time Dollar highs in London trade on Friday morning, with dealing desks pointing to two short-term drivers - Japan's huge monetary response to the recent earthquake disaster, and the US government's impending "shutdown" after lawmakers failed to agree a new budget ceiling.
Major-government bonds all fell in price, while stock markets rose alongside commodities.
Tin also hit new all-time highs. Silver Bullion broke above $40 per ounce for the first time since 2 Feb. 1980.
With Nato air-strikes reportedly damaging Libyan oil facilities, crude oil extended the gains it made Thursday "once the Eurozone rate hike was out of way," as one dealer notes, rising to $124 per barrel in London.
Hitting $1472.50 for US investors today, the Gold Price also rose sharply against the British Pound - hitting its best level since New Year at £900 per ounce - but was in flat against most other major currencies.
Silver Prices, in contrast, rose to new multi-decade highs across the board.
"Inflation expectations are rising," Bloomberg quotes Walter de Wet at Standard Bank in London. But "Most of the [Gold Price ] rally the past few days has been on the back of the Dollar weakening."
Recording a London Fix today of $40.22 per ounce, Silver Bullion's Dollar price has only been more expensive on eight trading days in history - all of them in Jan. and Feb. 1980, when the oil-billionaire Hunt brothers' attempted corner began to collapse.
"We've been of the opinion that silver is overvalued for some time now and we've been consistently...proven wrong," says Thomas Benedix, co-manager of $2.4 billion in commodities for the Tiberius fund manager in Switzerland, speaking to Reuters.
"Investor-related demand is probably higher than we've been anticipating, as is demonstrated by skyrocketing US Eagle coin sales and strong ETF demand."
After talks in Washington failed to raise the US debt ceiling ahead of tonight's constitutional deadline, "If we have a repeat of the 1995 episode, the short-term effects of weaker US growth could help spur gold higher," says one broker's note this morning.
Lasting for 20 days, the 1995 stand-off between the Clinton White House and Republican Congress cut a whole percentage point off US economic growth according to one estimate.
European finance ministers meeting in Godollo, Hungary meantime pressed Portugal - which formally requested a bail-out late Wednesday - to make sharp budget cuts as part of a possible €80 billion ($115bn) rescue.
"Along with the other commodity groups, precious metals have enjoyed the support coming from a weaker Dollar after yesterday's rate hike by the ECB," says Standard Bank's Marc Ground.
Looking ahead, "We foresee that as the deadline for QEII draws near [in end-June], increased uncertainty and speculation among market players concerning the possible paths the [US] Fed might follow could result in increased volatility in precious metals prices."
Day-to-day volatility in the Gold Price currently sits below its four-decade average on a rolling 1-month basis.
Silver Prices, in contrast, are more than half-as-volatile again as their 40-year average.
Friday's drop in US Treasury bonds meantime nudged 10-year yields up to a 6-week high of 3.59%, while the gap with inflation-protected TIPS rose to a 32-month high.
Betting on the futures market today put the odds of the Federal Reserve joining the European Central Bank with a rate-hike sometime in 2011 at more than 1-in-3.
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