Gold jumps to record high; silver surges

Spot gold hit a lifetime high on Monday, extending a record-breaking rally to its seventh consecutive session, buoyed by a weak dollar that languished around its three-year low amid increasing tension in the Middle East and North Africa. Silver, dubbed as the poor man's gold, surged nearly 4 percent on the US futures market to a 31-year high of $47.90.
"It's the dollar play," said a dealer based in Singapore. "People are now looking at $1,515 to $1,520 for gold, so there is more room for prices to go even higher." Spot gold hit a record high of $1,513.70 an ounce, and had eased to $1,511.85 by 0325 GMT.
US gold futures also hit an all-time high, at $1,514.50, and was trading at $1,512.50. The dollar index, a measure of the greenback's strength against a basket of currencies, rebounded slightly from a three-year low, as investors await a policy signals from a US Federal Reserve meeting later in the week.
Fed chief Ben Bernanke is set to hold a news briefing on Wednesday after the policy-setting Federal Open Market Committee meeting, which is expected to affirm a plan to complete the $600 billion bond purchase programme. "Investors expect the Fed to continue the low rates, which means the dollar could be even weaker, unless there were game-changing comments from Bernanke," said Ong Yi Ling, an analyst at Philip Futures.
The escalated violence in Syria and Yemen over the weekend also helped lift gold, seen as a safe haven during time of turmoil. US silver futures rose to a 31-year high of $47.87 an ounce, and eased to $47.83. Spot silver hit $47.88, highest since 1980 when silver rose to a record high near $50 as the billionaire Texan Hunt brothers cornered the market.
Spot silver has climbed a remarkable 55 percent so far this year, leading the commodities complex and outperforming the 10-percent gain in the 19-commodity Reuters-Jefferies CRB Index by a large margin. The Relative Strength Index on spot silver both rose above 90, its highest level since 1987, suggesting the market has been heavily overbought.
Yet buying interest in silver still runs strong, as the higher leverage in silver attracts speculators. Big speculators including hedge funds further extended their long position in COMEX gold futures as prices raced to new record highs and held onto their silver positions in the week to April 19, and regulator data showed.