Gold, silver move higher on safe haven demand

Gold and silver extended their recent highs on Tuesday driven by safe haven demand.

Gold rose US$7 to US$1,113.60/oz in London, its highest close since November 4, while silver climbed 11 cents to US$14.33/oz and reached its highest level since December 23.

"The fact gold prices have been rising at the same time as the yen is strong is a sure sign of safe haven buying, FastMarkets analyst William Adams said.

"With sentiment across other markets weak (and very weak for industrial metals and oil and getting weaker for equities), we would not be surprised if gold prices rise further."

Gold ETFs ( (exchange traded funds)) tracked by Bloomberg recorded a sixth consecutive daily inflow on Monday, Commerzbank added, with holdings up by 42t (1.35Moz) since the start of the year.

Silver was pulled up by gold and rising imports into China, the bank said.

FED MEETING

Markets are likely to remain subdued ahead of Wednesday's policy statement from the US Federal Reserve. Investors will be looking for clues about the Fed's stance on future interest rate hikes given anxiety over sluggish global growth.

"Should the Fed remain unconcerned, we could see the dollar strengthen and push gold down in the process, but we think this is an unlikely scenario," INTL FC Stone analyst Edward Meir said.

"If anything, the Fed will reiterate its dovish stance and this should push gold prices up instead."