SINGAPORE: Gold rose to a nine-year high on Tuesday as expectation of higher inflation from increased stimulus overshadowed the resultant gain in risk appetite, while silver breached the $20 level for the first time since September 2016.
Spot gold was up 0.4% at $1,822.11 per ounce by 0730 GMT after hitting its highest since September 2011. US gold futures rose 0.4% to $1,823.80.
"What's really driving the gold market is stimulus and we are going to get more of it. It's the eye candy that's driving sentiment right now," said Stephen Innes, chief market strategist at financial services firm AxiCorp.
Gold tends to benefit from widespread stimulus as the metal is widely viewed as a hedge against rising prices and currency debasement. Analysts are, however, divided on the outlook for inflation.
Silver jumped 2.2% to $20.33, its highest since August 2016.
"Silver is starting to outperform gold here. On the one hand, it's obviously appreciating on the basis of increased appeal for precious metals," IG Markets analyst Kyle Rodda said.
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