The price of gold topped $1,500 for the first time today as a weaker dollar plus fears over high inflation and debt attracted investors into the traditional safe-haven precious metal.
Gold hit $1,505.65 an ounce earlier this morning on the London Bullion Market. It later traded at $1,502.38.
Silver, meanwhile, hit a fresh 31-year high of $44.80 an ounce, helped by gold's gains.
Gold is seen as a safe store of value in troubled economic and political times. The precious metal began its run towards $1,500 on Monday after ratings agency Standard & Poor's revised its outlook on US sovereign debt to 'negative' from 'stable'.
S&P's move challenged Washington's gold-star 'AAA'-rated standard as it warned that politicians seemed unable to agree a plan to reduce a huge budget deficit, which is running at around 10 percent of gross domestic product.
The downgrade had also sent global share prices tumbling on Monday, coming amid growing concerns over global inflation, with China, India and the euro zone struggling to control prices.
Metals consultancy GFMS last week forecast that gold price would soar past $1,600 this year, driven primarily by fears over high inflation.
Gold has risen by 6% since the start of the year, breaking a series of record highs along the way. It topped $1,000 for the first time in March 2008.
Oil prices rally in line with equities
Oil prices jumped today in line with strong gains for equities and as the dollar weakened as the market awaited the latest snapshot of energy inventories in the US.
New York's main contract, light sweet crude for delivery in June, rose $1.37 to $109.65 a barrel. Brent North Sea crude for June gained $1.58 to $122.90 in London trade.
Analysts said that oil prices were supported by robust earnings results from Goldman, Intel and a strong rebound in equity markets, while the weak US dollar continues to provide further support.
They said the impact on oil demand from rising prices remains a concern.
