GOLD SURGED TO A NEW 25-YEAR HIGH ON TUESDAY AND SILVER HIT ITS HIGHEST LEVEL IN 23 YEARS AS A BLISTERING RALLY IN COMMODITIES LURED MORE PLAYERS INTO THE SECTOR, DEALERS SAID ACCORDING TO REUTERS. RECORD HIGH OIL PRICES AND INSTABILITY IN THE DOLLAR ENCOURAGED MARKET PARTICIPANTS TO ADD POSITIONS, WITH PLATINUM JUMPING TO ITS HIGHEST EVER LEVEL AND PALLADIUM RISING TO A LEVEL NOT SEEN IN NEARLY FOUR YEARS. "EVERYONE WANTS TO BE IN GOLD. PEOPLE ARE NOW TALKING ABOUT IT GOING TO $650 THEN UP TO $850, WHICH I HAVEN'T HEARD IN YEARS, BUT IT WAS THE SAME IN COPPER -- PEOPLE WERE ASKING US WHEN IT WAS $5,400, 'WILL IT GO TO $7,000?' AND I THOUGHT IT NEVER WOULD, BUT NOW IT'S $6,500," SAID CHRISTOPH EIBL, EXECUTIVE DIRECTOR OF TIBERIUS ASSET MANAGEMENT, AN ACTIVE FUND WITH $60 MILLION UNDER MANAGEMENT. "THESE ARE IRRATIONAL MARKETS." STEPHEN BRIGGS, ECONOMIST AT SG CORPORATE AND INVESTMENT BANKING, AGREED THAT GOLD WAS IN FASHION: "MOST PEOPLE ARE BUYING BECAUSE THE PRICE HAS GONE UP, NOT BECAUSE THEY THINK THE PRICE WILL GO UP," HE SAID. FEARS OVER THE NUCLEAR STAND-OFF IN IRAN -- PRESIDENT MAHMOUD AHMADINEJAD ON TUESDAY WARNED THAT ANY AGGRESSOR WOULD REGRET ATTACKING THE ISLAMIC REPUBLIC, WHICH IS EMBROILED IN A NUCLEAR DISPUTE WITH THE WEST -- BOOSTED THE PRICE OF BRENT CRUDE OIL AND GOLD. "GOLD ADORES BAD NEWS," BRIGGS SAID. "THE WORSE THE NEWS IS, THE BETTER. IF WE ARE LOOKING AT A SERIOUS CONFRONTATION BETWEEN THE U.S. AND IRAN, THAT'S NOT GOOD FOR THE WORLD ECONOMY BUT THAT'S GREAT FOR GOLD," HE SAID. GOLD CLIMBED TO $620.30 AN OUNCE LATE IN NEW YORK AND IT LAST CHANGED HANDS AT $620.20/1.00, COMPARED WITH $613.20/614.00 LATE ON MONDAY. --MORE 2357 Local Time 2057 GMT
