Traders said fund managers pumped more money into commodities before the end of the quarter, further feeding a long-running bull market.
Precious metals also got support from technical buying, strong base metals and a softer dollar, with prices seen heading toward their next big upside targets.
"We have multi-year highs and it's driven by investors' interest in commodities. I think funds are happy to have a strong quarter-end close for all these commodities," said a precious metals dealer in London.
Gold climbed to $586.40 an ounce, the strongest since January 1981, closing in Europe at $585.60/586.50. It closed in New York at $573.10/574.00 late on Wednesday.
Analysts said funds were diversifying into commodities as they saw stronger returns than other asset classes such as bonds and equities.
Silver has soared by 66 percent in the past 12 months, while gold and platinum have jumped by 36 percent and 27 percent respectively during the same period.
Analysts said the metal would now target $600.
"It is possible for gold to push through $600 an ounce," John Meyer, analyst at Numis Securities, said.
"Short covering may cause prices to spike toward $650 but there is a significant risk of profit-taking."
The metal got some support from the dollar that slipped on Thursday, succumbing to profit-taking after scoring gains earlier this week. A weak dollar makes gold cheaper for holders of other currencies and lifts gold buying.
"If the fund buying is strong enough, it could lift prices to that target ($600) a lot quicker than we think," said Robin Bhar, analyst at UBS Investment Bank.
Barclays Capital said in a report that after almost two months of consolidation, the market had placed itself in a good position to break on the upside.
Physical demand suffered in major consuming countries as buyers stayed on the sidelines because of volatile price moves.
Spot silver jumped to $11.50 an ounce, the highest since September 1983, and was last at $11.44/11.47, supported by speculative buying on hopes that an exchange-traded fund (ETF) will soon be launched.
"The rally in silver can expect added momentum from the high expectation and speculation surrounding the launch of the silver exchange-traded fund, rumored to be backed by 130 million ounces of silver," Standard Bank said.
Silver has risen more than 13 percent since early last week when the U.S. Securities and Exchange Commission cleared the way for final approval of the first ETF.
Prices jumped on expectations the silver-backed security will spur more demand for silver, mainly used in jewelry, photography and electronics.
ETFs are designed to track a commodity and trade like listed shares on an exchange. Some analysts said the fund had potential to attract up to 4,000 tonnes of silver, which would equal nearly two months of consumption.
Copper and zinc hit new highs on the London Metal Exchange, with further gains expected amid supply worries.
Platinum surged to its highest-ever level of $1,090 an ounce, ending at $1,088/1,092, against $1,071/1,075.
Palladium strengthened to $347 an ounce, the highest in more than three years, before closing at $346/350, versus $333.50/337.50 in the U.S. market.