Gold's bull market plowed ahead Monday, pushing bullion prices to two-year highs amid renewed worries about more terrorist attacks abroad and on U.S. soil.
Another slump in the dollar's value against key currencies also helped gold.
Near-term gold futures in New York rose $5.10 to $315.70 an ounce, highest since February 2000. Gold has risen from $279 an ounce on Jan. 1.
The latest rally began in Europe as the dollar drooped against the euro and the yen, continuing the buck's recent slide. The dollar closed at 125.36 yen in New York, down from 125.78 Friday and the weakest since December.
A falling dollar makes gold more attractive to safe-haven-seeking investors outside the United States.
"With the U.S. dollar on the ropes, at least for now, the yellow metal should remain firm," said John Reade, metals analyst at UBS Warburg.
Some economists argue that global investors finally are paying attention to the huge U.S. trade deficit, which for years has loomed as a potential negative for the dollar's value.
What's more, continuing terrorist attacks in the Middle East and warnings by Bush administration officials that the U.S. remains vulnerable to new attacks are turning more investors to gold, analysts said.
Gold's value also has been boosted this year by a surge in Japanese demand, as the government imposed limits beginning April 1 on insurance coverage for bank time deposits.
The change led nervous depositors to shift money to larger banks or convert some of their savings to gold, analysts said.
Demand for gold from investors in Japan will rise well over 200 metric tons this year, up from 70 tons in 2001, Newmont Mining President Pierre Lassonde said last week.
Gold mining shares have soared this year with bullion's price, and rallied again Monday. Newmont Mining rose 69 cents to $30.14, Goldcorp rocketed $2 to $21 and Agnico Eagle gained 48 cents to $15.93.
Silver prices rose with gold Monday. Near-term silver futures in New York jumped 11.4 cents to $4.77 an ounce, a 52-week high.