Q-Gold Resources Ltd.

Silver hits 30-year high

Last Updated: Monday, December 6, 2010 | 3:48 PM ET

CBC News

Gold futures settled at a record high close Monday as investors bought into the metal as a safe haven amid concerns that the U.S. economy may require more stimulus and that Europe's debt crisis may spread.

The widely traded February contract closed up $9.90, or 0.7 per cent, to $1,416.10 on the New York Mercantile Exchange.

S&P/TSX Global Gold Index 1-year chart.

Earlier in the session the price reached $1,422.40, less than $2 from the level for the intraday record of $1,424.30, set on Nov. 9.

Gold is up 29 per cent this year.

The Toronto Stock Exchange, heavily weighted in gold mining companies, rose.

The S&P/TSX composite index was up 35 points, or 0.3 per cent, to 13,214 late in the session. The S&P/TSX global gold index was up 1.4 per cent.

March silver prices reached a 30-year high of $30.115 US an ounce on the Nymex, before slipping back to close at $29.735, up .464 of a cent on the day.

On Sunday, U.S. Federal Reserve chairman Ben Bernanke said it was prepared to expand the American money supply even more by buying government debt in a move to stimulate borrowing and investment.

As well, Moody's downgraded Hungary's debt to the lowest grade that still allows large investors like pension funds to buy its bonds.

Investors were taking defensive positions over concerns about continuing slow economic growth in the United States and as well as lingering fears about the spread of the government debt crisis in Europe, said Colin Cieszynski, a market analyst at CMC Markets Canada.

"The factors that are driving people to buy up gold and silver are also pushing people out of things like the euro and into defensive areas like the U.S. dollar and the [Japanese] yen," he said.

Critics of the Fed's stimulus program have said it will create inflation. Investors use gold as an alternative to the U.S. dollar if they worry that inflation will lower the future value of the greenback.