Gold powered to a record high at $1,300 an ounce on Monday, with investors pouring more cash into the market on global economic health worries and the possibility of further quantitative easing to stimulate growth.
Silver, often considered the poor man's gold, rose to a 30-year high as investors also chased a cheaper alternative. The metal has gained nearly 30 percent this year.
Fund managers and industry experts say gold's rally has further to run in the longer-term as it provides a hedge against inflation amid expectations that central banks worldwide could resort to quantitative easing to support their economies.
Spot gold firmed to $1,299.30 an ounce by 1143 GMT, after hitting a historic $1,300 an ounce and versus $1,295.60 quoted late in New York on Friday.
"Every country in the world is giving signals that it could print money...what else are you going to trust to apart from gold," said Sean Corrigan, chief investment strategist at Diapason Commodities Management.
"The longer-term outlook for gold is well supported," he said. "There is no central bank that will stand aside and see its economy weaken."
Bullion's rally accelerated last week after the U.S. Federal Reserve signaled its readiness to pump billions of dollars into the economy through purchases of government debt, a process known as quantitative easing.
The Fed's statement had hit the dollar, which had edged up from five-month lows on Monday versus the euro but remained under pressure, offering further support for gold.
U.S. gold futures for December delivery rose $2.1 an ounce to $1,300.10 an ounce, within sight of an all-time high at $1,301.60 hit on Friday.
Industry participants predicted fresh highs for bullion. Delegates at the London Bullion Market Association annual conference forecast a price of $1,406 an ounce by September next year.
The world's biggest producer of the yellow metal, Barrick Gold said bullion could see above $1,500 an ounce next year.
But for the shorter term, charts show bullion's rally might face resistance.
"In the very short term, technicals suggest around $1,315-1,325 an ounce there could be a pullback," Corrigan said. "I think the market could get very tired between here and there," he said.
A potential correction could be limited, traders said, with the physical market still buoyant despite record high prices. Physical dealers in Singapore noted buying from India despite record prices as the festive season progressed.
"There is buying even today despite gold touching $1,300 as the rupee is in a supportive mode," said Pinakin Vyas, assistant vice-president with IndusInd Bank. "The buying momentum would continue on upcoming festivals after good monsoon rains and with the economy looking well."
Silver jumped to its highest in three decades at $21.61 an ounce.
"The medium-term outlook for silver remains positive in our view and we therefore raise our medium-term price target to $25 an ounce," said metals strategist Michael Widmer at Bank of America Merrill Lynch in a research note.
The world's largest silver-backed exchange-traded fund, the iShares Silver Trust, said its holdings rose to a record high at 9,613.02 tons by Sept 24 from 9,582.59 tons on Sept 23.
Silver's main sources of demand are for use in industrial applications such as semi-conductors and jewelry. Spot platinum was at $1,633 an ounce versus Friday's last quote of $1,637.70 an ounce while spot palladium was at $556 an ounce versus $556.70 an ounce.
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