Precious metals futures prices soared while bond futures plunged in value, both affected by weakness in the dollar.
Traders attributed the sharp move in gold and silver futures to the slumping dollar and tensions in the Persian Gulf.
Active interest in precious metals developed overnight in Europe and continued when the U.S. markets opened, said Stephen W. Platt, and analyst with Dean Witter Reynolds.
"It was a flight into hard assets away from stocks and bonds," he said, adding that he sees this as only a short-lived rally.
"The market is testing the Federal Reserve to see how aggressive they'll be in supporting the dollar," said Platt. "So far, they haven't been that aggressive. But maybe they'll raise the discount rate or actively intervene to support the dollar."