Gold rose and silver surged to 31-year highs on Monday, as fresh gains that pushed oil and grain prices to their highest since 2008 stoke inflation worries. While silver streaked ahead, rising to its strongest relative to gold since 1983 after the Hunt Brothers cornered the silver market, bullion prices have struggled for the past month to sustain new highs.
Spot gold rose 0.4 percent to $1,433 an ounce by 3:34 pm EDT (1934 GMT), off an earlier high of $1,438.55 an ounce. US gold futures for June delivery settled up 0.3 percent to $1,433. Total COMEX trade was less than 82,000 lots, one of the quietest sessions this year, preliminary Reuters data showed.
Silver climbed to its highest in 31 years at $38.58 an ounce, sending the gold-to-silver ratio to its lowest level in 18 years. It was later up 2 percent at $38.48. Silver prices are fast closing in on $40 an ounce, lifted by interest in the metal as a cheaper proxy for gold and expectations that industrial demand is set to improve. But analysts remain wary of silver's extreme volatility, which has led to some heart-stopping reversals in recent years.
Gold is also benefiting from concerns some smaller eurozone economies such as Portugal and Ireland will continue to struggle with sovereign debt, and from unrest in the Middle East and North Africa. For platinum group metals, platinum rose 1 percent to $1,782 an ounce, while palladium gained 1.5 percent to $781.22.
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