LONDON, April 21: Gold prices rallied to record highs on Thursday for a fifth straight session and silver soared, as the dollar index tumbled for a third day, prompting investors to buy bullion as a currency hedge.
Gold, which jumped above $1,500 an ounce for the first time on Wednesday, once again rose in tandem with riskier assets such as equities on inflation fears.
Spot gold rose 0.5 per cent to $1,505.34 an ounce by 12:21 p.m. (1621 GMT), after hitting a record $1,508.75 an ounce.
US gold futures for June delivery rose $7 an ounce to $1,505.90.
Silver gained 1.6 per cent to $45.93 an ounce. US silver futures trade was active, with volume approaching 150,000 lots, set to be one of the busiest sessions in 2011.
The gold/silver ratio — which shows how much silver an ounce of gold can buy — is set to fall for a ninth consecutive session to below 33, a 28-year low.
“Silver continues to attract huge speculative interest.
Gold also benefits as a hedge against US currency depreciation, as the dollar tumbled for the third straight day as super-low interest rates and the crushing weight of a massive budget deficit pushed the greenback closer to an all-time low against a basket of major currencies.
The euro jumped above $1.46 on Thursday for the first time in 16 months before falling back slightly as investors take on board growing concerns about the US debt outlook.
In late European trade Thursday, the euro was at $1.4581, off a high of $1.4649 earlier and up from $1.4521 in New York late Wednesday.
The dollar fell sharply too to 81.80 yen from 82.54 yen.
The dollar stood at 81.80 yen (82.54) and 0.8824 Swiss francs (0.8882). The pound was at $1.6567 (1.6407).
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