World equities jumped to their highest level in nearly 33 months on Thursday while the dollar hit a three-year low as upbeat US and European corporate earnings spurred investors into higher-yielding assets.

Gold surged to a lifetime high for a fifth straight session on the sharply weaker dollar, with lingering tensions in the oil-producing Middle East offering additional support.   

Investor focus has shifted to solid US and European corporate earnings and signs the global economy is chugging along even as the Federal Reserve remains cautious about when it will start to unwind its super-loose policy, offsetting concerns over sovereign debt problems on both sides of the Atlantic.

This has emboldened investors to pile back into riskier assets, though some analysts advised caution as worries about the euro zone debt crisis and problems in the supply chain following the Japanese earthquake stayed in the background.   

The MSCI All-Country World Index advanced almost 0.7 percent to a high of 350.34, last seen in July 2008. The index has risen around 6 percent so far this year.

"After a slow start, earnings have improved quite rapidly and results from companies such as Intel and Apple have certainly boosted investor sentiment," said Keith Bowman, equity analyst at Hargreaves Lansdown.   

"There is some nervousness in the background, particularly in relation to the situation in Japan and what that means for the supply chain, but as of today the markets have concentrated on good corporate results."    

German business sentiment fell in April as expectated, the closely-watched Ifo survey showed. The FTSEurofirst 300  index of top European shares  was up 0.3 percent at a one-week high, with technology stocks leading gains after iPod maker Apple smashed earnings forecasts.

Asian stocks recovered sharply from a stumble earlier in the week and rose to their highest level since January 2008 while the emerging stocks index climbed 0.9 percent.   

The rally in equity markets cooled demand for safe-haven government bonds, pushing US and euro zone benchmark German debt lower, though lingering concerns about the currency bloc's sovereign debt crisis limited losses.       

With little chance of the Fed raising interest rates any time soon, the dollar index fell 0.85 percent to 73.737, its lowest level since August 2008. Technical charts suggested it could move towards a record low of 70.698 hit earlier that year.   

"Strong earnings reports from a lot of companies have driven risk appetite and we have seen huge moves in all dollar crosses, but it would be surprising if we didn't see some profit-taking," said Richard Falkenhall, currency strategist at SEB in Stockholm. 

The sharply weakening US dollar has suffered the most against commodity-linked currencies such as the Australian and Canadian dollars, as well as emerging markets currencies such as the Singapore dollar, as some policymakers in Asia allow more currency strength to fight imported inflation.   

 Spot gold hit a record high of $1507.19 an ounce and spot silver soared to a 31-year high while the Australian dollar powered to peaks above $1.07 -- a level not seen since the currency became free-floating in the early 1980s.   

The weakness in the dollar and a drop in US stockpiles helped lift Brent crude prices above $124 a barrel, with Reuters data showing the correlation between a softer greenback and rising oil prices at its strongest this year. - Reuters