Jan. 3 (Bloomberg) -- Gold futures rose to a record closing price and silver topped $31 an ounce, extending a rally to the highest since 1980, as Europe’s sovereign-debt woes spurred demand for precious metals as a haven.
Gold rallied 30 percent in 2010, the 10th straight annual gain and the biggest yearly advance since 2007. Last month, Moody’s Investors Service put the credit ratings of Greece and Spain on review and slashed Ireland’s ranking by five levels. Gold priced in U.K. pounds climbed to a record today.
“I’m bullish on gold this year because it is still mainly a haven play,” said Park Jong Beom, a trader at Tong Yang Futures Trading Co. in Seoul. “The European-debt crisis remains unresolved, and investors continue to favor it as a safe-haven asset.”
Gold futures for February delivery rose $1.50, or 0.1 percent, to close at $1,422.90 an ounce at 1:51 p.m. on the Comex in New York, a record settlement. The intraday all-time high was $1,432.50 on Dec. 7.
Silver futures for March delivery climbed 18.8 cents, or 0.6 percent, to $31.125. Earlier, the price reached $31.275, the highest for a most-active contract since March 1980.
The Federal Reserve has kept U.S. borrowing costs low and purchased bonds to boost growth. Precious metals advanced last year as the European Union bailed out Greece and Ireland. Holdings in exchange-traded products backed by gold gained 17 percent in 2010.
‘Fear of Inflation’
Loose monetary policy will help bolster raw materials, said Matthew Zeman, a metal trader at LaSalle Futures Group in Chicago.
“All commodities are going to benefit from the fear of future inflation, and investors will continue to pile into hard assets,” he said.
Last year, silver surged 84 percent, most since 1979.
Earlier, gold dropped as much as 0.5 percent and silver was down as much as 1 percent as a rally in U.S. equities eroded the investment appeal of the metals. Bond yields also climbed.
“Certainly, gold and silver are not cheap at these prices,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “The stock market will rally, and bond yields will go up, which will make commodities less attractive.”
Palladium futures for March delivery fell $2.90, or 0.4 percent, to $800.40 an ounce on the New York Mercantile Exchange.
Platinum futures for April delivery gained $8.20, or 0.5 percent, to $1,786.40 an ounce.
Last year, palladium jumped 96 percent, and platinum gained 21 percent.
