Gold jumped to a record high for a fifth straight trading day on Monday as the prospect of more declines in the US dollar drove investors into the precious metal, with record exchange traded fund holdings helping silver to its highest in more than three decades.
-- Silver jumps to 31-year top
Heightened inflationary threats despite interest hikes by China and the European Central Bank boosted gold's safe haven appeal, while silver also attracted buying from investors looking for a cheaper alternative to bullion. The gold-to-silver ratio was at a 28-year low around 35. Spot gold added $1.35 to $1,474.05 an ounce by 0539 GMT, having risen as high as $1,476.21 after the euro jumped to a 15-month high against the US dollar.
"I think there is a good chance that gold could hit $1,500 an ounce within this quarter. And perhaps even higher if we see the weakness in the dollar persist and the Federal Reserve continues their relatively easy monetary policy," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.
Gold has gained more than 10 percent since late January when political unrest began to flare in the Middle East and North Africa. But Monday's gains could be capped by a drop in energy prices. Brent crude fell below $126 after the African Union said Muammar Qadhafi has accepted a roadmap to end the civil war in Libya, including an immediate ceasefire in the North African producer.
Spot gold is heading towards $1,518 per ounce based on its wave pattern and a Fibonacci projection analysis, according to Wang Tao, a Reuters market analyst for commodities and energy technicals. Spot silver rose as high as $41.93 an ounce, its strongest in 31 years. IShares Silver Trust said its holdings hit another record at 11,242.89 tonnes by April 8 from 11,192.80 tonnes on April 7. US gold futures for June rose $2.5 to $1,476.6 an ounce after rising to a record at $1,478 an ounce. The physical sector saw selling from Thailand and Indonesia, but volume was light as holders waited for more gains in gold prices before cashing in. Premiums were steady at between 70 cents and $1 an ounce to the spot London price in Singapore.