Investors are still turning to gold and silver as an alternative to paper currencies.

The price of gold hit another record high on Tuesday just above $1,420 while silver has gone over $28.

Analysts said the weak dollar and fears of inflation are key reasons investors and international governments are stockpiling gold.

"We have a combination: inflation fears, currency market uncertainty, fears about the financial strength of some countries," Alexander Zumpfe of Heraeus Metals told Reuters.

"Inflation concerns and euro zone debt worries have helped accentuate the surge this week initiated by the weakness in the dollar," said investment bank Fairfax in a note.

Others said traders are buying gold and silver just because they have been very good investments.