Gold hovered near $600 an ounce after matching a 25-year high on Monday and silver spiked to a 23-year peak, with funds and investors adding positions to reap strong returns from the current bull run in commodities.
Firm oil prices, a drop in the dollar and soaring base metals prices supported precious metals, which retained scope for further gains, analysts said.
"It seems extremely unlikely that gold doesn't trade $600 an ounce in the spot market at some time either today or this week," said John Reade, analyst at UBS Investment Bank.
The bank lifted its gold price forecasts to $610 a month ahead and to $630 in three months.
Spot gold rose as high as $598 an ounce to match Friday's peak, the highest since January 1981, before easing to $597.10/597.90 by 0943 GMT. It closed in New York at $588.00/588.90 on Friday.
Investors have turned to the booming commodities markets for alternatives to lagging equity, bond and foreign exchange markets, dealers said.
Tensions in the Middle East, uncertainty about the dollar's outlook, worries about rising energy costs and speculation that central banks would diversify into metals have also boosted gold's appeal, they said.
Gold, used in jewellery and investment, has risen around 16 percent this year and about 40 percent in the past 12 months.