* Gold prices hit record for fifth straight session
* Dollar index near record low, inflation simmers
* Gold/silver ratio set for ninth straight session drop
* Coming up: U.S. CFTC Commitment of Traders report Friday
(Recasts, adds comment, updates prices, changes byline,
dateline, previously LONDON)
By Frank Tang
NEW YORK, April 21 (Reuters) - Gold prices rallied to
record highs on Thursday for a fifth straight session and
silver soared, as the dollar index tumbled for a third day,
prompting investors to buy bullion as a currency hedge.
Gold, which jumped above $1,500 an ounce for the first time
on Wednesday, once again rose in tandem with riskier assets
such as equities on inflation fears.
"The driving factor is currency uncertainty. The dollar
index is down again, so the inflation factor is creeping into
the market," said Bill O'Neill, partner of commodity firm LOGIC
Advisers.
A weaker dollar means Americans will have to pay more for
imports, which can feed inflation.
Spot gold <XAU=> rose 0.5 percent to $1,505.34 an ounce by
12:21 p.m. (1621 GMT), after hitting a record $1,508.75 an
ounce. U.S. gold futures for June delivery <GCM1> rose $7 an
ounce to $1,505.90.
Silver <XAG=> gained 1.6 percent to $45.93 an ounce. U.S.
silver futures trade was active, with volume approaching
150,000 lots, set to be one of the busiest sessions in 2011.
The gold/silver ratio -- which shows how much silver an
ounce of gold can buy -- is set to fall for a ninth consecutive
session to below 33, a 28-year low.
"Silver continues to attract huge speculative interest.
Even though silver is outperforming gold, the genesis of this
rally is still related to the flight-to-safety factors
supporting gold," O'Neill said.
GOLD AS CURRENCY HEDGE
Gold also benefits as a hedge against U.S. currency
depreciation, as the dollar tumbled for the third straight day
as super-low interest rates and the crushing weight of a
massive budget deficit pushed the greenback closer to an
all-time low against a basket of major currencies. []
Gold prices have risen more than 5 percent so far this
month and are on track for a sixth straight week of gains,
reflecting strength across the commodity markets.
The Reuters-Jeffries CRB index <.CRB>, a global benchmark
for commodities, rose further on Thursday after notching its
biggest one-day gain in two weeks in the previous session.
Investors have rushed into risky assets due to strong U.S.
corporate earnings and signs the global economy is chugging
along even as the Federal Reserve stays very cautious about
when it will start to unwind its super-loose policy.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Timeline of gold's rally: http://r.reuters.com/sew88r
Various assets' performance: http://r.reuters.com/mag29r
Gold:silver ratio: http://r.reuters.com/jyx88r
Inflation-adjusted gold price: http://r.reuters.com/ren88r
Interview with investor Jim Rogers: http://bit.ly/f39Z9Q
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Among other precious metals, platinum <XPT=> rose 0.9
percent to $1,807.75 an ounce, while palladium <XPD=> gained
1.6 percent to $763.43.
Prices at 12:21 p.m. EDT (1621 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCM1> 1505.90 7.00 0.5% 5.9%
US silver <SIK1> 45.945 1.484 3.3% 48.5%
US platinum <PLN1> 1817.00 14.20 0.8% 2.2%
US palladium <PAM1> 768.40 9.50 1.3% -4.3%
Gold <XAU=> 1505.34 7.19 0.5% 6.1%
Silver <XAG=> 45.93 0.73 1.6% 48.8%
Platinum <XPT=> 1807.75 16.60 0.9% 2.3%
Palladium <XPD=> 763.43 11.68 1.6% -4.5%
Gold Fix <XAUFIX=> 1504.00 -3.00 -0.2% 6.6%
Silver Fix <XAGFIX=> 46.26 147.00 3.3% 51.0%
Platinum Fix <XPTFIX=> 1812.00 2.00 0.1% 4.7%
Palladium Fix <XPDFIX=> 765.00 6.00 0.8% -3.3%
(Additional reporting by Jan Harvey in London; Editing by
David Gregorio)
