Gold powered to a new high near $980 an ounce on Friday after crude oil set an all-time high of above $103 a barrel, igniting inflation worries and another round of buying from investors and speculators.

Palladium jumped to its highest level in more than six years and silver hit a 27-year peak. Platinum rebounded from its lows but given the absence of new developments in South Africa's supply problems, gains are likely to be capped.

Gold jumped as high as $975.90 an ounce, up from $968.90/969.70 late in New York on Thursday. Gold has gained more than 16 percent this year, and the next upside target pegged by dealers is $1,000.

Record high oil and expectations of more interest rate cuts in the United States add to inflation pressures, elevating gold's appeal as a hedge against rising prices, while volatile stock markets have encouraged investors to shift some of their money into gold and other precious metals.

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"The target is $1,000. I personally hope it will be $1,000 within a month," said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo, adding that gold was likely be driven by movements in oil in coming weeks. Crude oil rallied to another record above $103 a barrel as Ecuador shut a key export pipeline and a fire hit a major European natural gas plant.

While oil is at a record price in inflation-adjusted as well as nominal terms, gold has lagged. According to analysts at GFMS gold's inflation-adjusted record is $2,079 an ounce.

"Most of the funds are buying inflation hedges such as gold, silver and oil. It's still a bull market, where hedge funds and banks buy precious metals," said William Kwan, a dealer at Phillip Futures in Singapore.

"I think inflation is really getting out of hand. I am looking at $955 for support and resistance at $985," said Kwan, who pegged upside target for silver at $20.

Silver rose as high as $19.92 an ounce, its highest in 27 years, up from $19.74/19.79 an ounce in New York.

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