By Claudia Assis and Chris Oliver, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold settled at a record and silver rallied 2.4% Monday as inflation fears kept investors attracted to precious metals, which were also helped by a weaker dollar.
Gold for June delivery GCM11 -0.29% added $5.30, or 0.4%, to end at $1,509.10 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, it hit an intraday record of $1,519.20 an ounce.
That was gold’s sixth consecutive high-water mark and its eighth straight day of gains.
May silver SIK11 -2.59% rallied $1.09, or 2.4%, to $47.149 an ounce. It had traded as high as $49.82 an ounce.
The thinly traded, front-month April contract settled at $47.151 an ounce, near the nominal record for spot silver.
Back in January 1980, spot silver hit an intraday high of $50.35 an ounce and settled at a record $48.70 an ounce.
Investors booked some profits in both metals Monday, said Bart Melek with TD Securities in Toronto.
For silver, “the trajectory might be too steep,” bringing to some investors’ minds an asset bubble, Melek added.
However, silver’s gains could continue, he said. In addition to its rally alongside gold on worries about inflation and currency debasement, silver also faces supply shortages amid more investment and industrial demand, Melek said.
Additional gains in silver may be limited, said Adam Klopfenstein, a senior market strategist with Lind-Waldock in Chicago.
“The fundamentals still point to higher prices, but I just think we got a little bit ahead of ourselves,” he said. Silver is unlikely to rise much beyond $55 an ounce, he added.
It has become a trader’s market and thus much more volatile, he said.
Silver futures gained 8.2% last week, their largest weekly gain since early December. The rally, however, wasn’t reflected in holdings of the world’s largest exchange-traded fund backed by silver.
Holdings in the iShares Silver Trust SLV +0.65% fell to 11,150.30 metric tons on Thursday, from 11,183.69 metric tons the previous day. The ETF gained 0.7% during regular trading hours, but recently fell 0.3% in after-hours trading.
Precious metals and other commodities got an extra lift from the dollar, which continued to fall Monday.
