LONDON (Reuters) - Gold surged to a record high for the fourth day running on Tuesday, fuelled by renewed concern over high sovereign debt in euro zone countries such as Ireland and Greece and inflationary pressures.
Silver touched $28.46 an ounce, the highest since March 1980, palladium saw $728.22 an ounce, its highest since April 2001. Platinum hit $1,790 an ounce its highest since July 2008.
Spot gold hit $1,422.30 a troy ounce. The precious metal was bid at $1,418.80 an ounce at 12:56 p.m. from $1,409.09 late in New York on Monday. U.S. gold futures also hit a record $1,422.10 an ounce.
“We have a combination: inflation fears, currency market uncertainty, fears about the financial strength of some countries,” said Alexander Zumpfe of Heraeus Metals.
Zumpfe said remarks by World Bank President Robert Zoellick that leading economies should consider readopting a modified gold standard, had also helped reignite interest in the precious metal.
Worries about price pressures were reinforced last week by the U.S. Federal Reserve, which announced further monetary policy easing to help boost economic growth in the world’s largest economy, the United States.
“Inflation concerns and euro zone debt worries have helped accentuate the surge this week initiated by the weakness in the dollar,” said investment bank Fairfax in a note.
News that the Fed would buy back $600 billion (371 billion pounds) of U.S. government bonds initially weakened the dollar and propelled commodity prices higher, particularly gold, which has gained nearly 30 percent this year so far.
Also on the radar is this week’s G20 summit. Officials from Germany, Brazil, China and South Africa are among those expressing concern that the Fed’s policy could weaken the dollar and drive up commodity prices.
If the G20 fails to defuse global tensions, it may heighten investor concerns that policymakers are drifting further apart, leaving the world economy vulnerable.
“There is a lot of uncertainty ahead of the G20 meeting. If there are no surprises we may see a correction afterwards,” said David Wilson, analyst at Societe Generale.
“Gold is using any excuse to go higher.”
Traders think the target this rally is $1,475 an ounce. “Beyond that $1,500 is only a short ride,” one trader said, adding high seasonal physical demand was another factor behind the rise in precious metal prices.
Investor interest can be seen in the holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, which gained 2.43 tonnes to 1,294.196 tonnes, their highest so far this month.
That interest is reinforced by gold in other currencies.
Gold in euros hit the highest since June at 1,021.84 euros per ounce, in Swiss francs 1,369.33 francs a ounce, also the highest since June. Gold in sterling touched a record high 880.37 sterling an ounce.
Spot silver was bid at $28.38 an ounce from $27.69 late in New York on Monday and palladium was at $725.50 from $705.22.
Autocatalyst precious metal platinum was bid at $1,784.24 an ounce compared with $1,771.50 late in New York on Monday.
Reporting by Pratima Desai; Editing by Alison Birrane