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Gold rose Thursday to a two-week top and platinum group metals rallied to their highest in more than 20 months as fresh investment money poured into commodities and other asset classes across the board.

A shutdown this week of a smelter at the world's third biggest platinum producer, Lonmin, also buoyed platinum to its highest since August, 2008, and palladium to its strongest since March, 2008.

Rick Bensignor, chief market strategist of Execution Noble LLC, said gold was boosted by euro's gains and its ability to hold above key support at $1,095 (U.S.). He also cited a sharp rally in gold equities Thursday.

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"If the stock market rallies strongly, gold stocks should outperform bullion. I think the mentality in the marketplace right now has shifted to just buying every dip."

A gauge of gold mining stocks, Arca Gold BUGS index, jumped more than 5 per cent, surpassing the 1 per cent gain in bullion.

Spot gold rose to $1,127.75 an ounce, its highest since March 17, and was at $1,123.95 an ounce at 2:59 p.m. ET, against $1,112.80 an ounce late in New York on Wednesday.

On technical charts, Thursday's rally lifted gold prices above all its major moving averages. Some analysts think a market is overbought when its prices rise above moving averages.

U.S. June gold futures settled up $11.60 an ounce, or 1 per cent, at $1,126.10 an ounce on the Comex division of the New York Mercantile Exchange.

The bullion market took heart as the euro rallied against the dollar on quarterly positioning and as investors looked ahead to the U.S. non-farm payrolls report Friday.

"It's benefiting from the beginning of the quarter with new fund money and fresh buying coming in," said Jesper Dannesboe, senior commodity strategist at Société Générale.

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Investor interest looked to be the theme across several commodity markets, where copper touched a 20-month high and oil rallied to an 18-month peak.

"Still not big volumes but enough to push it higher. Also increasing is the number of investors and speculators thinking that 'the base metals are going higher so maybe there's some upside in gold'," said Mr. Dannesboe.

Bullion ended the first quarter just below 2 per cent higher on currencies volatility related to euro zone debt and firm stock markets, but it has struggled to sustain gains since hitting a record above $1,200 an ounce last December.

Analysts look divided on gold's prospects. Some believe bullion's gains will be capped due to the strong outlook of the dollar, but others feel that relationship is no longer valid.

"Gold versus euro/dollar is broken, if you look longer term. It could be the case for intra-day movements maybe," Mr. Dannesboe said. "We think this year dollar is going up and gold is going up."

Analysts are expecting the government payrolls report on Friday to show the economy added 190,000 jobs in March, albeit aided by temporary government hiring for the 2010 U.S. Census.

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Spot platinum was at $1,662.50 an ounce against Wednesday's $1,641.50 an ounce while palladium was at $486.50 an ounce versus $477.50.

Palladium and platinum ended the first quarter 17 per cent and 12 per cent higher, respectively, surpassing the single-digit gains posted by gold and silver.

Palladium and platinum prices began to rally after ETF Securities Ltd. launched the first U.S. PGM exchange traded funds in early January, which now have about 900,000 ounces of the combined metals.

A recovering auto industry led by China is also another factor boosting platinum group metals (PGM) prices.

Silver was at $17.82 an ounce, after hitting $17.97 an ounce, its highest in 10 weeks, compared with Wednesday's $17.46 an ounce.

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