Gold rose to within a whisker of its all-time high on Wednesday, as record low US new home sales stirred talk of extended central banks' accommodative policies, and a possible collapse of Portugal's government rekindled eurozone debt worries.
Bullion rose 0.6 percent to just short of its record $1,444.40 an ounce set on March 7, rebounding over 4 percent in the last eight sessions amid safe-haven buying and ongoing Western air strikes on Libya. Political unrest in other Arab countries also underpinned gold as Yemen's president offered to step down by year end to appease mounting demands for his resignation.
Spot gold rose 0.6 percent to $1,437.55 an ounce by 2:29 pm EDT (1829 GMT). Gold accelerated gains to hit a session high of $1,440.90, its highest since March 7, after data showed the US housing market slide was deepening as new home prices fell to their weakest since 2003. US April futures settled up 0.7 percent at $1,438 an ounce.
While commodity markets were mostly quiet on Wednesday, gold was one of the most actively trading markets with volume approaching 140,000 contracts at midday. Spot silver soared to a 31-year peak of $37 an ounce, surpassing its previous high set two weeks ago. It later gained 2.3 percent to $37.17 an ounce.
Year to date, silver has gained over 20 percent, and gold was up just over 1 percent. Silver was boosted by near-term supply tightness and strong industrial demand on expectations the global economy continued to recover. Both platinum and palladium, mainly used as autocatalysts in vehicles, have come under pressure since Japan's March 11 earthquake and tsunami shut car factories in Japan. Platinum climbed 1.1 percent to $1,751.49 an ounce and palladium gained 1.5 percent to $743.97.