With Libya on the edge of a civil war, protesters took to the streets in Yemen, Iran and Oman and clashed with government forces.

Spot silver struck US$34.74 an ounce, its highest since early 1980. It was trading at US$34.58.

Spot gold hit an intra-day high of US$1,434.45, just 20 cents below the record high hit in the previous session. It had since edged lower and quoted at US$1,431.75.

Fears that unrest could spread to countries including Saudi Arabia and Iran sent oil surging to a 2- year high, and triggered safe haven buying in precious metals.

"If the contagion gets a little bit out of hand in Saudi Arabia or Iran, the results are not positive for equities and not positive for inflation. It's an event that everyone is trying to avoid," Jonathan Barratt, managing director of Commodity Broking Services.

A surge in oil prices is unlikely to hurt the U.S. economy unless it is sustained, said the U.S. Federal Reserve Chairman Bernanke.

The euro stayed on the backfoot early in Asia on March 2 after yet again failing to break through a key resistance level, helping lift the dollar off a 3- month low against a basket of major currencies.