The price of gold hit an all-time high today of $1,036.60 an ounce after a fall in the dollar boosted its attractiveness to investors.

Buyers looking for an alternative investment piled into the precious metal breaking March 2008's spot gold record of $1,032.80 an ounce.

Copper prices also rose above $6,000 a tonne.

The fall in the dollar was fuelled by a newspaper report, which said that Gulf nations want to replace the currency as the main oil currency.

The report — denied by the big oil producing nations — said that Arab states were in secret talks with Russia, China, Japan and France to replace the dollar with a basket of currencies in oil trading over nine years.

On Wall Street, news that Australia's central bank had become the first to boost interest rates helped fuel confidence about the global economic outlook and sent the Dow Jones Industrial Average up 120.01 points or 1.3 per cent to 9,719.76 points.

On the FTSE 100, the rise in metal prices prompted a surge in mining stocks and helped the index to surge past the 5,100 mark to 5116.49 points.

Kazakhmys, the Kazakh miner added 79p or 7.88 per cent to £10.81, Vedanta added 145p or 7.58 per cent to £20.57 and Fresnillo edged up 45p or 6 per cent to 795p.

Rio Tinto, the Anglo-Australian mining group, also climbed 145.50p or 5.67 per cent to £27.09 after it signed an investment agreement with the Government of Mongolia for the development of the Oyu Tolgoi copper-gold complex, one of the world's richest copper deposits.

The group said that production should start in 2013 with a five-year ramp-up to full production of 450,000 tonnes of copper per year and 330,000 ounces of gold

The biggest riser was Tullow Oil, up 90p or 8.07 per cent at £12.05.