Gold, Silver Hit Highs; Dollar Heads for Record Low

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The prices of gold and silver continue to rise on the international markets.

The price of gold hit an all-time high at just under $1,518 per ounce early Monday and the price of silver shot up more than eight percent to $49.82, just slightly below its all-time high of $50.35 that it hit in January of 1980.

"Everyone is buying. There is good buying interest from China," one dealer in Hong Kong told Reuters.

Some analysts warn that a correction for silver is inevitable, but they say the longer term outlook for gold and silver is very strong.

Some analysts believe gold could even trade even higher.

"We as a company believe that we may see $1,600 an ounce by the end of the year," Angelos Damaskos, a fund manager at Sector Investments, which specializes in gold and oil investments,told the BBC.

"But gold could easily surprise everybody and go to significantly higher levels because of the relatively small supply of the metal," he said.

Dollar Weakens

While commodities head to new highs, the dollar may be headed for record lows.

It has been getting weaker all year in the international markets. Few analysts see any end in sight for its decline.

"It's the dollar play," said a Singapore-based dealer, referring to the gold rally. "There is more room for prices to go even higher."

China may start moving away from the dollar. Some leading Chinese bankers believe their country should diversify some of their international investments out of the dollar into other securities.

"Investors expect the Fed to continue with low rates, which means the dollar could be even weaker, unless there were game-changing comments from (Chairman Ben) Bernanke," said Ong Yin Ling, with Phillip Futures.

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