NEW YORK ( TheStreet ) -- Gold and silver prices popped to highs Wednesday as safe haven buyers jumped into the market.

Gold for April delivery added $10.40 to close at a record $1,438 an ounce at the Comex division of the New York Mercantile Exchange. The gold price was close to a new intraday high touching $1,441.20 an ounce, just $4 shy of its old record. The spot gold price was rising $9.80, according to Kitco's gold index.

"Close, although not the all time gold highs, are primarily driven by some inflation on all global fronts and again attention to Portugal, Ireland and other problems that are economic, not just geopolitical," argues George Gero, senior vice president at RBC Capital Markets. Portugal's parliament was nearing a vote on austerity measures, which if defeated, would result in the resignation of the prime minister, leaving the country leaderless for a few months. The result could push borrowing costs through the roof as Portugal tries to avoid a bailout.

"What could derail all this," says Gero, "is a rise in interest rates in the future, changing currency values and the high crude prices dampening growth."

The Bank of England also held rates low for March, but three members voted in favor of a rate hike. Inflation is at 4.4% and could exceed 5% later in 2011.

Gero argues that silver is set to outperform gold as a safe haven metal and an industrial metal.

Silver certainly shined Wednesday as prices rose 92 cents to a 31-year record settle of $37.19 an ounce after hitting $37.29 intraday.

"I think there are enough reasons to stay long in the market" for gold and silver says Brian Booth, senior market strategist at Lind-Waldock, who sees $42 silver. As silver keeps closing above recent 31-year highs, traders will become more interested in the metal as it has "proved" its ability. Gold could benefit from the same momentum trading on Thursday as traders digest its new record.

On the physical side, silver is also in high demand.

Nigel Moffett, head of Treasury at Gold Corp., owner of the Perth Mint, which refines 350 tons of gold and 160 tons of silver a year, says that the big change in precious metal demand in 2011 is strong silver buying from Germany. The most desired item is the Mint's one kilogram silver coin, which sells for $1,116 plus a small premium. " For silver it's a general demand ... silver is the popular one."

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