Silver Prices Surge as Gold Moves Higher

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"Safe-haven buying continues."

Gold prices were higher Wednesday while silver prices climbed towards $37 an ounce as safe haven buying continued.

Gold for April delivery was adding $11.50 to $1,439.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price was close to a new intraday high touching $1,441.20 an ounce, just $4 shy of its old record. The spot gold price was rising $10.50, according to Kitco's gold index.

"Close, although not the all time gold highs, are primarily driven by some inflation on all global fronts and again attention to Portugal, Ireland and other problems that are economic, not just geopolitical," argues George Gero, senior vice president at RBC Capital Markets. Portugal's parliament was nearing a vote on austerity measures, which if defeated, would result in the resignation of the prime minister, leaving the country leaderless for a few months. The result could push borrowing costs through the roof as Portugal tries to avoid a bailout.

The Bank of England also held rates low for March, but three members voted in favor of a rate hike. Inflation is at 4.4% and could exceed 5% later in 2011.

The real outperformer seems to be silver, rising $0.61 to $36.88 after closing at a 31-year high Tuesday of $36.26 an ounce.

"I think there are enough reasons to stay long in the market" for gold and silver says Brian Booth, senior market strategist at Lind-Waldock, who sees $42 silver. As silver keeps closing above recent 31-year highs, traders will become more interested in the metal as it has "proved" its ability.

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