Mumbai, Mar 1: Gold prices strengthened to a new peak of Rs 12,565 in the bullion market here today on persistent safe-haven buying from investors in view of rising global cues.

Silver, however, declined on lack of buying interest at higher levels.

Continuing economic concerns, a US dollar near record lows and weaker equities boosted gold futures on Friday in New York, a trader said.

In addition to a generally weaker dollar, inflation concerns also supported gold prices, he added.

April gold settled USD 7.50 higher at USD 975 an ounce after hitting a contract high of USD 978.50 overnight on the Comex division of the New York Mercantile Exchange.

Comex May silver settled 20.5 cents higher at USD 19.915 an ounce after reaching a contract high at USD 20.055 an ounce overnight.

Nearby March silver overnight hit USD 19.925,the highest front-month price since November 1980.

Turning to local market, standard gold (99.5 purity) firmed up by Rs 45 per ten grams to Rs 12,565 from Rs 12,520 yesterday and pure gold (99.9 purity) also moved up to Rs 12,620 from Rs 12,575 yesterday.

However, silver ready (.999 fineness) dropped by Rs 75 per kg to Rs 24,020 from Rs 24,095 previously.