Spot gold hit a record high and silver rose to a 31-year high on Monday, fuelled by concerns of rising inflation globally, while a lingering eurozone sovereign debt crisis continued to boost safe-haven demand in precious metals. Spot gold hit a record of $1,488.50 an ounce, before easing to $1,484.55 by 0637 GMT. US gold futures were nearly flat at $1,485.70.
"It wouldn't be a surprise to see gold push higher in the current environment," said Darren Heathcote, head of trading at Investec Australia, adding that investors were concerned about inflation, especially when oil prices remain high. Technical analysis indicated that gold may target $1,518 an ounce, said Reuters market analyst Wang Tao. Reflecting growing investment interest, holdings in the SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, jumped 1.5 percent to a nearly three-month high of 1,231.159 tonnes.
Spot silver rose to 31-year highs for the third consecutive session, hitting $43.34 an ounce. It was trading at $43.14. "Silver's rally has been dumbfounding," said a Tokyo-based trader. "Bears are very weak now after silver has steadily climbed from under $30 to $43 in less than two months."
Holdings in the world's largest silver-backed exchange-traded fund, iShares Silver Trust, gained 0.64 percent to 11,044.07 tonnes by April 15, down 1.5 percent from a week earlier. The gold-silver ratio, used to measure how many ounces of silver is needed to buy an ounce of gold, fell to below 35, its lowest since the early 1980s. Spot silver has rallied 40 percent so far this year, making gold's 4.6 percent gain negligible.
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