Leading shares looked to consolidate their position above the 4900 level on the London stock market today, forcing nervous investors to hedge their positions.

They were happy to chase the price of gold back above $1000 an ounce on the US futures and spot market for the first time in six months. Dealers said speculators are running scared about the dollar's continued weakness and the sustainability of the global economic recovery.

Some traders are sceptical about the precious metal being able to sustain its current levels. But the buyers hoarding the stuff are said to range from private investors right the way through to institutions. They are worried about the state of economies such as the UK and US and the outlook for interest rates.

The gold spot price has risen above $1000 just five times in the past; on Tuesday, once in February and three times in March last year.

Naturally enough, mining shares responded to the latest move in gold and the weaker dollar. Kazakhmys rose 23p to 1036p, Rio Tinto 42p to 2506½p and Randgold Resources 72p to 4291p. Lonmin also added a further 29p to 1698p amid continuing hopes of a renewed bid from Xstrata, up 8p at 862p.

Xstrata offered 3300p a share last October but this was rejected. The Lonmin price has come up from 1361p since last week.

Leading shares generally posted modest gains as investors continued to feed on the latest rash of takeovers in the hope it may be the start of a new trend. The FTSE 100 index rose 16.54 points to 4949.72. Credit Suisse remains upbeat about prospects for the equity market throughout the remainder of the year and is forecasting a year-end 5100 for the Footsie 100.

Shares of bid target Cadbury continued to trade at a premium to the 745p a share being offered by America's biggest food producer Kraft. Jefferies Research has joined a growing band of brokers who believe Kraft will have to stump up more for its bid to succeed. It has placed a new take out value on the shares of 900p.

US investment bank JPMorgan has repeated its neutral rating on Cadbury shares, but has jacked-up its target from 610p to 820p. The credit rating agency Standard & Poor's has raised its rating from hold to buy.

Only yesterday, Sanford Bernstein put a price target on the confectioner of 1008p a share. It points out Cadbury is trading on a P/E of 15 to 16 — less than the multiple 19.5 times Mars paid for Wrigley in May, last year.

Jefferies is also upbeat about the UK's big food retailers. Wm Morrison, 0.3p firmer at 287.3p, is top of its shopping list with a target of 300p. Tesco, up 1.1p at 378.1p, is rated overweight with a target of 410p, while J Sainsbury, 0.5p dearer at 328.2p, is rated a hold with a target of 340p.

In Tokyo, sentiment was undermined by a stronger yen which hit big exporters such as Honda. JVC Kenwood surged 23% on reports it was likely to post its first operating profit in three quarters. Oil refiner Showa Shell Sekiyu advanced after saying it would invest $1.1 billion (£671 million) to build a thin-film solar-cell plant. Tokyo Dome jumped 8.1% to 295 yen with the end of speculation it would be removed as a constituent of the Nikkei Average after a review of the index this year was ruled out.

The Nikkei put in a late rally to end 72.29 higher at 10,393.23.

Tech-related companies clung to earlier gains, with Advantest edging up 0.9% to 2,345 yen and Tokyo Electron up 0.2% to 5010 yen.

Hong Kong shares made headway as the Shanghai market remained firm on hope of continued support from the Chinese government, but traders said profit-taking was likely to cap future rises.

Chinese banks and financial firms extended recent gains after Beijing's move to raise the limit for stock investments by foreign funds reassured investors the government was unlikely to take drastic measures to stifle the market's rally.

Lender ICBC gained 0.87%, China Construction Bank jumped 1.6% and Bank of China rose 1.7%. Insurer China Life was up 1% and oil producer Citic Resources Holdings gained 1.3% to HK$2.29.

The Hang Seng index was 312.00 points higher at 20,941.31.