Gold rose 1.9 percent to a two-week high and palladium surged to its highest in two years, helped by a drop in the dollar. Platinum also extended gains.

Copper surged to new record highs on Friday of ,276, reflecting worries about supply from Indonesian mines and spurred on by renewed investment fund buying, analysts and asset managers said on Friday.

Copper, used in construction and electronics, ended at ,250 a ton, up from Thursday but below the high of ,276 it struck in electronic trading.

In New York, copper futures ended mixed Friday amid some end-of-the-week profit-taking, but managed to set all-time highs as ongoing supply worries in an already tight market should continue to support the upside, sources said.

"Overall, it has been a pretty impressive price performance since last Friday, when we broke out of that trading range," said one COMEX floor dealer, referring to the market’s near six-week trading band from .12 to .30 a lb.

Copper for May delivery settled down 0.35 cent at .3945 a lb, on the New York Mercantile Exchange’s COMEX division, after trading between .3810 and a new life-ofcontract high at .4120.

Since the beginning of the year, the benchmark May copper contract has risen over 20 percent.

Silver has risen more than 21 percent this year mainly on hopes for the launch of the security — an exchange-traded fund (ETF) — despite opposition from a group representing consumers in the United States.

"The initial market reaction, when the ETF news came out, was a little bit hesitant but it has got back into its stride now," said Stephen Briggs, economist at SG Corporate and Investment Bank.

"It hasn’t yet been launched. It’s still got to go through the formalities and it remains to be seen how much interest there is going to be, but the market is clearly assuming that there is going to be great interest."

Spot silver rose as high as .74 an ounce and was quoted at .72/10.75, or up 0.5 percent, in New York, compared with .63/10.66 late on Thursday.

The US Securities and Exchange Commission said on Tuesday it approved rule changes to allow the American Stock Exchange to list shares in Barclays Plc’s iShares Silver Trust.

The product is designed to track the price of the metal.

But the Silver Users Association said on its Internet site www.silverusersassociation.org it opposed the launch of a silver fund as the product would make the metal too expensive or illiquid, and could threaten jobs.

"The creation of a silver ETF would require the holding of silver in allocated accounts, which would result in the removal of large amounts of silver from the open markets. If the silver ETF is approved, it will mean higher product costs and lost jobs in our industry," it said.

Analysts said the fund had potential to attract up to 4,000 tons of silver, which would be equal to nearly two months of consumption.

The silver market is expected to remain in deficit in the next couple of years as industrial and consumer demand is seen outpacing mine supply, estimated at around 20,000 tons in the current year.

Silver, used in making jewellery and industrial goods, also took direction from copper, which hit a record ,257 a tonne on Friday on heavy fund buying.

Gold rose as high as 0.70 an ounce, before holding around 0.00/560.90 in New York, from 9.90/0.80 previously.

It stayed below a 25year high above 4 hit in early February.

"The consolidation has been going on and at some stage it needs to come to an end," said Michael Widmer, analyst at Macquarie Bank, adding a drop in the dollar supported gold.

"If the macro-economic news points towards weakness in crucial parts of the US economy, then the dollar will come under further downward pressure and that again should be positive for the gold price."

The dollar tumbled after a weaker-than-expected US new home sales report reduced expectations for further currency-boosting Federal Reserve interest rate rises.

Palladium increased to 8/333 an ounce, the highest in nearly two years. It had closed Thursday at 8/323.

Platinum rose as far as ,046 an ounce before easing to ,045/1,049, against ,042/1,047.