Gold Prices continued to hit a series of all-time record highs on Thursday, touching $868 per ounce for the second time late in London trade after recovering from a 1.5% pullback on stronger-than-expected US jobs data.

The fresh volatility – which continues to rise as Gold Prices push higher – came after ADP Employer Services said US companies added some 40,000 jobs last month, beating consensus forecasts of just 30,000 growth.

The Labor Dept. added that initial jobless claims fell from a two-year high in the last week of Dec. – but the Gold Market's retreat on the news proved as short-lived as the jobs data was tepid.

With the US Dollar pushing the Euro almost one cent lower from the morning's one-month high on the currency markets, the Gold Price in Euros also reached a new record high above €589.50 per ounce.

For British investors wanting to Buy Gold Today, the metal traded above £440 per ounce for the first time in history – fully 38% higher from the start of 2007.

"Commodities prices are going to go up no matter what happens to the US Dollar, even if it rises," said Jim Rogers, the legendary fund manager and investment author, to Reuters today. (Must the Dollar Fall for Gold to Rise? Read on here...)

"There are serious supply/demand shortages which have developed over the past 25 to 30 years," Rogers explained. "I sound like a broken record, but it ain't over yet. It's got a long way to go."

Gold's new highs came even as crude oil prices slipped back from Wednesday's top of $100 per barrel, apparently caused by one Nymex floor trader buying 1,000 barrels – the smallest lot possible – and then selling it straight back for a loss.

"He paid $600 for the right to tell his grandchildren that he was the first in the world to buy $100 oil," Stephen Schork, a former oil trader, told the BBC today.

Oil retreated from its triple-digit record today despite worsening supply news, led by a sharper-than-expected reduction in US energy stockpiles reported for the end of Dec. The head of Libya's National Oil Corp. also told reporters that the Opec oil cartel – which controls 40% of the world's daily supplies – "can do nothing" to reduce oil prices.

Asian stock markets meantime suffered another miserable day, losing 1.6% in Tokyo and 2.4% in Hong Kong. Europe's major bourses were mixed, with the FTSE100 in London adding almost 1% thanks to rising metal and energy stocks while the Dax in Frankfurt slid 0.5%.

Wall Street stocks gained 0.4% on the US employment data, and Treasury bond prices slipped for the first session in six. But 10-year US government bonds still yielded just 3.94% by the London close. Two-year yields earlier touched a four-year low of 2.78%.

"For anyone who is worried about the economy, 2008 is off to a lousy start," said the Washington Post. "The bigger worry today is clearly economic growth," agreed the New York Times this morning, but "oil and gold aren't the only commodities shooting up.

The Times points to soaring grain prices. Thursday saw wheat, cocoa and sugar prices rise in London, while soybeans hit a new 34-year high. Copper futures rose 2.1%.

"This stagflationary environment creates a dilemma for central banks," says Joachim Fels for Morgan Stanley. "If they play tough on inflation, stagnation may turn into a full-blown recession. If they decide to stimulate the economy, inflationary pressures may intensify."

Echoing the change in emphasis seen in Wednesday's release of the latest Federal Reserve minutes, Fels thinks "more signs of economic slowdown or even recession in early 2008 are likely to swing the balance towards more aggressive monetary easing in the advanced economies."

But for investors, savers, businesses and consumers alike, cutting interest rates in the teeth of rising prices will do nothing to restore confidence in official government currency.

``We've got economic weakness and commodity prices rallying,'' said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. ``It's not a pretty picture for the Fed, but everything's lined up for gold.''

"The Gold Price is just not a weak Dollar story," said James Vail, manager of $1.2 billion at ING Investment Management, to Bloomberg today.

"Gold has made new highs in all currencies. It's translating to 'gold is money' again. I wonder if we're in a period where people are getting a little concerned about paper currency."

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