Gold hit a record high for a second straight session on Wednesday, powered by investor demand for safe-haven assets and a slide in the dollar in anticipation of a eurozone rate hike, while silver hit fresh 31-year peaks. Unrest across the Arab world and unease over the eurozone's debt finances have also encouraged inflows of cash into gold, which has risen by more than 2 percent this week.
Spot gold hit a record $1,461.91 an ounce and was bid at $1,460.60 an ounce at 1422 GMT, against $1,450.60 late in New York on Tuesday. US gold futures for June delivery rose $9.60 an ounce to $1,462.10. "We have been seeing frenzied buying as markets scythed through the all-time high levels," said Pradeep Unni, senior analyst at Richcomm Global Services.
"Fundamentals are still bullish, with geopolitical instability supporting the markets substantially."The focus this week is on Thursday's three central bank policy meetings, at which the European Central Bank is seen almost certain to raise rates, while the Bank of Japan and the Bank of England are expected to hold their fire. "It is unquestionable that the demand for precious metals derives from the devaluation of the leading currencies - the dollar, the pound and the euro," said Angelos Damaskos, a fund manager at Sector Investment Managers.
Reflecting the pick-up in investor demand for gold was the first inflow of metal into the SPDR Gold Trust, the world's largest exchange-traded fund, since March 16. Holdings of silver in the world's largest ETF, the iShares Silver Trust are at a record 11,162.45 tonnes, having risen by more than 240 tonnes so far this year. Silver has reaped the benefits of investor demand for safe-haven assets and protection from inflation and on Wednesday rose to its highest level since January 1980. Spot silver was last at $39.67 an ounce, having risen earlier by more than 1 percent to $39.75. Spot platinum was last up 1.2 percent at $1,806.99 an ounce, while palladium was up 0.7 percent at $791.63.
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