Gold surged to a record high for the fourth day running on
Tuesday, fueled by renewed concern over high sovereign debt in euro
zone countries such as Ireland and Greece and inflationary
pressures.
Silver touched $28.46 an ounce, the highest since March 1980,
palladium saw $728.22 an ounce, its highest since April 2001.
Platinum hit $1,790 an ounce its highest since July 2008.
Spot gold hit $1,422.30 a troy ounce. The precious metal was bid
at $1,418.80 an ounce at 1256 GMT from $1,409.09 late in New York
on Monday. U.S. gold futures also hit a record $1,422.10 an
ounce.
\"We have a combination: inflation fears, currency market
uncertainty, fears about the financial strength of some
countries,\" said Alexander Zumpfe of Heraeus Metals.
Zumpfe said remarks by World Bank President Robert Zoellick that
leading economies should consider readopting a modified gold
standard, had also helped reignite interest in the precious
metal.
Worries about price pressures were reinforced last week by the
U.S. Federal Reserve, which announced further monetary policy
easing to help boost economic growth in the world's largest
economy, the United States.
\"Inflation concerns and euro zone debt worries have helped
accentuate the surge this week initiated by the weakness in the
dollar,\" said investment bank Fairfax in a note.
News that the Fed would buy back $600 billion of U.S. government
bonds initially weakened the dollar and propelled commodity prices
higher, particularly gold, which has gained nearly 30 percent this
year so far.
G20 CONCERNS
Also on the radar is this week's G20 summit. Officials from
Germany, Brazil, China and South Africa are among those expressing
concern that the Fed's policy could weaken the dollar and drive up
commodity prices.
If the G20 fails to defuse global tensions, it may heighten
investor concerns that policymakers are drifting further apart,
leaving the world economy vulnerable.
\"There is a lot of uncertainty ahead of the G20 meeting. If
there are no surprises we may see a correction afterwards,\" said
David Wilson, analyst at Societe Generale.
\"Gold is using any excuse to go higher.\"
Traders think the target this rally is $1,475 an ounce. \"Beyond
that $1,500 is only a short ride,\" one trader said, adding high
seasonal physical demand was another factor behind the rise in
precious metal prices.
Investor interest can be seen in the holdings in the world's
largest gold-backed exchange-traded fund, SPDR Gold Trust, which
gained 2.43 tons to 1,294.196 tons, their highest so far this
month.
That interest is reinforced by gold in other currencies.
Gold in euros hit the highest since June at 1,021.84 euros per
ounce, in Swiss francs 1,369.33 francs a ounce, also the highest
since June. Gold in sterling touched a record high 880.37 sterling
an ounce.
Spot silver was bid at $28.38 an ounce from $27.69 late in New
York on Monday and palladium was at $725.50 from $705.22.
Autocatalyst precious metal platinum was bid at $1,784.24 an
ounce compared with $1,771.50 late in New York on Monday.
(Reporting by Pratima Desai; Editing by Alison Birrane)