Gold futures surpassed a record price of $1,380 an ounce Thursday on investor fears that the Federal Government's new $600 billion stimulus package may spur inflation and devalue the U.S. dollar.
Gold futures for December rose 3.4% to $1,383.20 an ounce at about 2:40 p.m. Eastern time Thursday after touching an intraday high of $1,384.30. Silver futures for December were up more than 6% Thursday to $25.97 an ounce.
Precious metal prices have been rising all year as investors look for a safe haven amid fears of currency volatility. Gold is perceived as a safe investment as countries look to boost their economies by using monetary policy to increase liquidity and cut borrowing costs.
Gold and silver received a further boost after the U.S. Federal Reserve on Wednesday launched the second phase of its quantitative easing program, the so-called QE2. The Fed will buy up to $600 billion more in long-term U.S. Treasury bonds in an effort to stimulate a U.S. economy that many say is growing too slowly.