NEW YORK—Worries about inflation as oil prices hit 2½-year highs boosted gold futures and sent silver to a 31-year peak.
The most actively traded gold contract, for June delivery, was recently up $8.40, or 0.6%, at $1,437.30 a troy ounce on the Comex division of the New York Mercantile Exchange.
"Gold is one of the things that people who fear inflation like to buy," said George Gero, vice president with RBC Capital Markets Global Futures.
Worries about rising consumer and producer prices were heightened as Nymex crude for May delivery touched an intraday high of $108.78 a barrel.
The inflation fears also benefited silver, which is often bought for similar investment reasons as gold. Because it is also used in electronics, silver has also become a more attractive investment in recent months as the economy has improved.
Comex May silver was recently up 74.8 cents, or 2%, at $38.480 with its intraday high of $38.570 the metal's highest price since Feb. 13, 1980.
"Silver is a bridge between investment demand and industrial demand," Mr. Gero said.
Both metals have been underpinned in recent months as the combination of ultra-low interest rates—which boost the allure of noninterest-bearing gold and silver—and Federal Reserve purchases of Treasurys to stimulate the economy has caused some to believe the Fed won't be able to sop up extra liquidity in time to avoid problematic consumer- and producer-price increases over the longer term.
Last week, a key Fed official warned against moving prematurely to tighten monetary policy, but his comments contrasted with several others who said in recent days that the central bank needs to start withdrawing monetary stimulus in coming months to tame the inflation threat.
