New York: Gold prices rose to an all-time high above $1,450 (Dh5,336) an ounce on Tuesday, as new peaks in crude oil and grains fuelled inflation fears and a downgrade of Portugal's credit rating fed safe-haven demand.
Bullion prices broke out after a struggle to sustain new highs in the last month, and silver soared to a 31-year peak after Federal Reserve Chairman Ben Bernanke suggested he was committed to complete a $600 billion stimulus program as scheduled in June.
"What it shows is that big money continues to believe gold will go higher...because Bernanke wants to grow at any cost," said Axel Merk, portfolio manager of the $600 million Merk Mutual Funds.
"The other reason for gold to go up is that there was a downgrade in Portugal, so people realise there are still some issues."
Spot gold was up 1.1 per cent to $1,446.40 an ounce at 11:46am EDT (1546 GMT), off the session high, a record $1,450.14 an ounce.
US gold futures for June delivery rose 1.1 percent to $1,448.80 in modest trading volume.
Silver gained 1.2 per cent to $38.88 an ounce, after hitting a session high of $38.99, the highest since the Hunt Brothers cornered the market in the early 1980s, when prices briefly hit a record of just below $50 an ounce.
Silver has outperformed gold in recent months, rising 22 per cent in the first quarter compared with gold's 0.7 per cent.
The gold:silver ratio, which shows how many silver ounces are needed to buy an ounce of gold, fell to a 28-year low at 37.3.
On Monday, Bernanke said an increase in US inflation has been driven primarily by rising commodity prices globally, and was unlikely to persist.
His comments contrasted with those of other US central bank officials, some of whom called for tighter monetary policy.
Rising oil and grain prices boosted gold's inflation hedge appeal. Brent crude rose to a 2-1/2-year highs on geopolitical risks to supply from the Middle East, while corn futures hit a record high as worries over tight supplies persisted.
Platinum rose 0.5 per cent to $1,788.20 an ounce, while palladium also gained 0.5 per cent to $783.40.
