Gold has been attracting nervous investors

Gold futures for June, the most popular contract, closed at $599.60 an ounce in the US, but reached a peak of $601.90 in earlier trading, a 25-year high.

Prices have now surged about 20% since the end of November.

The prices of commodities like copper, zinc, silver and sugar have also jumped recently as investors bought in.

"Commodities are the flavour of the month," said David Gornall, head of foreign exchange and bullion at Natexis Commodity Markets.

"Gold, silver, zinc or copper, it doesn't really matter, as long as it's a commodity."

Strong demand

Many see them as a safer investment as uncertainty over interest rates and worries of growing inflation have lowered confidence as to the sort of returns that can be made from stock, currency and bond markets.

The rush to gold in recent years is in stark contrast to the metal's dull performance for much of the previous 20 years.

Out of favour during the heady stock market rises of the 1990's, the price of gold hit a 25-year low of $255 in 2001.

Fast emerging economies like India and China are strong buyers of the metal, which, at the moment, isn't being mined quickly enough to meet demand.

Although output increased last year after some temporary supply problems in 2004, new capacity is relatively scarce.

The bear market of the 1990s made it difficult for companies to fund exploration and it became largely uneconomic to open new mines.