Gold and silver futures rose after a report showed U.S. producer prices rose more than expected last month, increasing the appeal of the precious metals as a hedge against inflation.

Gold futures ended lower Monday after a senior Treasury official said the U.S. supports the proposed sale of part of the gold reserves held by the IMF, the world's third largest holder of the precious metal.

Labor Department data showed that in the past 12 months ending in January, producer prices soared7.4 percent. That was the most gain since October 1981. Gold rose 31 percent in 2007 as consumer costs increased at the fastest pace since 1990.

Gold futures for April delivery climbed $4.30, or 0.5 percent, to $944.80 an ounce at 11:09 a.m. on the Comex division of the New York Mercantile Exchange. Earlier, the price fell as much as 1.2 percent.

Metals most-active contract reached a record high of $958.40 an ounce on February 21.

Silver futures for March delivery rose 34.5 cents, or 1.9 percent, to $18.43 an ounce. The price earlier reached $18.495, the highest since December 1980.

Overall, gold gained 12 percent this year, while silver climbed 21 percent.

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