Gold hit record highs and silver a 31-year peak on Monday, lifted by elevated oil prices and a weaker dollar, amid expectations the Federal Reserve will lag other central banks in tightening monetary policy.
Precious metals have already been boosted this year by safe-haven demand after unrest swept the Middle East and North Africa and concerns resurfaced over the debt levels of some smaller euro zone economies, most notably Portugal.
Spot gold rose as high as $1,476.21 an ounce and was bid at $1,473.10 an ounce at 0908 GMT, against $1,472.70 late in New York on Friday. Silver hit its highest since early 1980 at $41.93 and was later at $41.36 an ounce against $40.85.
"Looking across the board, over the last week there has been investor interest in the metals," said Jeremy East, global head of commodity derivatives trading at Standard Chartered, which last week predicted gold could hit $2,100 an ounce by 2014 on the back of dollar weakness and low interest rates.
Gold is better supported than silver, which has a dual role as an investment vehicle and an industrial commodity, he said, although silver has outperformed gold so far this year, with the gold:silver ratio dropping to 28-year lows.
"Gold is definitely supported by the Portugal bailout and the weakening dollar, but silver seems much more speculative," he said. "If gold pulls back $50, we would expect to see some good physical demand coming in. Silver needs to do a lot more."
Holdings of the world's largest silver-backed exchange-traded fund, New York's iShares Silver Trust, rose to a record 11,243 tonnes on Friday.
The dollar eased towards last week's 16-month low against a currency basket, hit by positive signs for investor risk-taking. A weaker dollar tends to benefit gold, as it makes dollar-priced commodities cheaper for other currency holders.
Analysts also expect that other countries' central banks will be quicker to mop up excess liquidity and raise interest rates than the Fed, with the European Central Bank and China already raising rates.
The U.S. economy is still not strong enough for the Fed to start reversing its extremely accommodative monetary policy, Fed official Janet Yellen said on Saturday.
"Comments from Fed members, both voting and non-voting, in recent weeks and over the weekend have only served to highlight the lack of agreement on the direction of monetary policy," said UBS analyst Edel Tully in a note.
"The gold community is granting a greater possibility to further quantitative easing post-June, and the lack of synergy among Fed officials only adds weight to these expectations. The beginning of an economic soft spot has also underpinned gold."
Concerns remain over further political problems in the United States after a potentially damaging government shutdown was threatened late last week.
"With one crisis seemingly put to one side another confrontation looms in the coming weeks between Democrats and Republicans with respect to the raising of the debt ceiling, which is currently set at an eye watering $14.25 trillion," said CMC Markets analyst Michael Hewson.
Elsewhere, U.S. gold futures for June delivery rose 40 cents an ounce to $1,474.50. Among other precious metals, platinum was at $1,800.24 an ounce against $1,803.75, while palladium was at $791.97 against $790.75.
(Reporting by Jan Harvey; Editing by Alison Birrane)