Spot gold rose as high as $1,476.21 an ounce and was bid at $1,467.40 an ounce at 1323 GMT, against $1,472.70 late in New York on Friday. Silver hit its highest since early 1980 at $41.93 and was later at $41.13 an ounce against $40.85.
Investor money has flowed into to commodities in general and precious metals in particular this month as investors worry about the potential for rising inflation in developing markets and changes to monetary policy in the United States.
"Gold investor interest is likely driven by ongoing concerns about inflationary pressures, both in emerging and developed economies, sovereign debt levels and economic uncertainty, notably in the light of current high oil prices," said BNP Paribas analyst Anne-Laure Tremblay.
"Global monetary policy -- not only the US -- is one of the key themes for gold in 2011," she added.
A weaker dollar is benefiting gold as it makes commodities priced in dollars cheaper for other currency holders. The dollar eased against a basket of currencies, reaching a session low soon after news of another earthquake in Japan.
The US economy is still not strong enough for the Fed to start reversing its extremely accommodative monetary policy, Fed official Janet Yellen said on Saturday.
"Comments from Fed members, both voting and non-voting, in recent weeks and over the weekend have only served to highlight the lack of agreement on the direction of monetary policy," said UBS analyst Edel Tully in a note.
FURTHER QUANTITATIGE EASING
"The gold community is granting a greater possibility to further quantitative easing post-June, and the lack of synergy among Fed officials only adds weight to these expectations," she added."
Concerns remain over further political problems in the United States after a potentially damaging government shutdown was threatened late last week.
Oil prices, meanwhile, pulled back on Monday after the African Union said Muammar Gaddafi had accepted a roadmap to end the civil war in Libya, though they remain near multi-year highs.
Elsewhere, US gold futures for June delivery eased $5.60 an ounce to $1,468.50. Among other precious metals, platinum was at $1,798.24 an ounce against $1,803.75, while palladium was at $792.98 against $790.75.
Both metals have been helped this year by expectations that industrial consumption by the automotive sector, which uses platinum and palladium in autocatalysts, will recover. However, high prices are likely to weigh on that demand, traders said.
"For the platinum group metals, we saw industrial demand coming into the market when platinum came down to $1,700 and palladium down to $735, but at these levels, there is no real industrial demand around," said Jeremy East, head of commodity derivatives trading at Standard Chartered.