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Gold hit a record high on Wednesday, the eighth in nine sessions, and base metals surged, riding a wave of optimism that central banks will open the taps and flood markets with cheap money to keep growth from stalling.

Spot gold rose to $1,349.80 an ounce, silver hit a 30-year peak and platinum was at its firmest in around five months.

“The second round of the commodity bull-run has already started. I’m quite positive it will last possibly until 2016,” said Tetsu Emori, a fund manager at Tokyo-based Astmax.

In base metals, London tin hit a record high, and copper saw its strongest levels in over two years after Tuesday’s unexpectedly bold action by the Bank of Japan to cut interest rates close to zero and say it would pump cash into the financial system through asset purchases.

That was seen as the first stage in a reflationary splurge by policymakers in Japan, the United States and Britain.

Global markets are now preoccupied with the likelihood that the Federal Reserve will make a new sortie into “quantitive easing” — effectively printing money to buy assets — next month, an expectation that pushed the dollar down broadly.

“The BoJ announcement signalled more QE (quantitative easing) in the market, and investors are losing interest in currencies and buying gold,” said a Singapore-based dealer, expecting the next resistance level for gold at $1,350.

“For now gold is the asset of choice.” For other investors, base metals were the place to be.

Three-month copper on the London Metal Exchange rose $133 to $8,308 a tonne, its highest since July 2008.

“Copper is looking good. We have broken through some pretty tough areas ... and once again we are getting into areas that we haven’t seen for a while,” said Jonathan Barratt, managing director of Commodity Broking Services.

He added that supply worries in copper and tin supported sentiment, and commodities were attracting the attention of funds keen to put cheap cash to work.

Equities extended gains and the dollar held near lows after the BoJ move, fueling speculation that other central banks may take additional action and flood global economies with cheap money.

Tin hit $26,500, with gains amplified by supply worries from top exporter Indonesia.

“In tin, it is the concerns we have out of Indonesia, which always plays havoc on the market,” Barratt said.

LME aluminium rose to $2,400.50, while zinc touched $2,345, the highest for both metals since April. Nickel rose to $24,995, its highest since May.

“We have seen comparatively small moves up in the metals in recent days, but they add up and we are at a point where copper can seriously threaten the old highs.

"It’s no coincidence that we are seeing this while the Chinese are away,” a metals trader in Singapore said.

Copper hit a record high of $8,940 in July 2008.

Other markets were less energized.

US wheat rose half a percent and corn was largely unchanged as the grain markets held on to advances made in the previous session amid the broader rally in financial markets.

Soybeans slid nearly half a percent as estimates of a record production in the United States and improved outlook for plantings in South America weighed on the market.

Oil slipped from a five-month high after a report showed US crude stockpiles jumped more than forecast last week, a sign oversupply may persist.

Front-month US crude on Tuesday touched $82.99 a barrel, the highest price since early May, and on Wednesday, the November contract traded at $82.89, up 7 cents on the day.

US crude inventories gained 4.4 million barrels in the week to Oct. 1, the American Petroleum Institute reported late on Tuesday, compared with average analyst expectations for a 300,000-barrel increase in a Reuters survey. 


Reuters