Silver scales highest level since late 2012
For gold, 2,800 a viable yearend target, analyst says
China cuts key lending rates to support growth

Oct 21 Reuters Gold rose to a fresh high on Monday, extending its blazing rally amid uncertainties surrounding the U.S. election, simmering Middle East tensions and rate cuts by major central banks, while silver scaled a near 12year peak.

Spot gold was up 0.3 at 2,727.95 per ounce, as of 0517 GMT, after hitting an alltime high of 2,732.73 earlier. U.S. gold futures were 0.5 higher at 2,743.00.

Helped by bullion39;s rally, spot silver rose 0.9 to 33.95 per ounce, its highest since late 2012.

The current market environment consists of interest rates moving south combined with heightened geopolitical risks a scenario which suits gold on both fronts, said Tim Waterer, chief market analyst at KCM Trade.

Investors also digested news that China cut its benchmark lending rates following reductions to other policy rates last month as part of a package of stimulus measures to revive the economy.

Gold demand in top consumer China has taken a hit amid high prices and an economic slowdown.

Elsewhere, traders are pricing in a 99 chance of a U.S. Federal Reserve interest rate cut in November. The European Central Bank cut interest rates by a quarter point last week.

Lower interest rates enhance gold39;s allure, as bullion yields no interest. Gold is also considered a safe investment during times of economic and political turmoil….