Gold hits new high, silver at 31-yr peak

London: Gold rallied to a second successive record high on Wednesday, powered by a slide in the dollar and by ongoing investor demand for safe-haven assets, while silver hit fresh 31-year peaks.

Unrest across the Arab world and unease over the euro zone's debt finances are encouraging inflows of cash into gold, which has risen by more than 2 per cent this week.

This has more than offset the potentially damaging impact of China's latest increase in interest rates and a less pessimistic take on the U.S. economy from the Federal Reserve.

The focus this week is on Thursday's three central bank policy meetings, at which the European Central Bank is almost guaranteed to raise rates, thereby boosting the euro against the dollar, while the Bank of Japan and the Bank of England are expected to hold their fire.

Spot gold was last up 0.4 per cent at $1,456.25 an ounce by 0834 GMT, having...hit an all-time high of $1,458.80 earlier in the day. Gold has rallied by more than 5 per cent in the past three weeks.

COMEX June gold futures were last up 0.4 per cent at $1,457.80, having touched a contract high of $1,460.00.

Six months from here, we think (the strength) is sustainable for both gold and silver, but I wouldn't be surprised if we see a short-term pullback because a lot of this is driven by the euro, which is pretty strong against the dollar, said Standard Bank analyst Walter de Wet.

The dollar fell to 14-month lows against the euro, which rallied to an 11-month peak against the yen ahead of the first rate rise from the ECB since July 2008 to tackle rising inflation pressures.

THREE BANKS, THREE POLICIES

The minutes from the U.S. Federal Reserve's most recent meeting, released on Tuesday, did not contain anything to suggest the central bank would...hit an all-time high of $1,458.80 earlier in the day. Gold has rallied by more than 5 per cent in the past three weeks.

COMEX June gold futures were last up 0.4 per cent at $1,457.80, having touched a contract high of $1,460.00.

Six months from here, we think (the strength) is sustainable for both gold and silver, but I wouldn't be surprised if we see a short-term pullback because a lot of this is driven by the euro, which is pretty strong against the dollar, said Standard Bank analyst Walter de Wet.

The dollar fell to 14-month lows against the euro, which rallied to an 11-month peak against the yen ahead of the first rate rise from the ECB since July 2008 to tackle rising inflation pressures.

THREE BANKS, THREE POLICIES

The minutes from the U.S. Federal Reserve's most recent meeting, released on Tuesday, did not contain anything to suggest the central bank would...