Gold climbed in New York to about 0.6 percent from the record as unrest in Libya and a weakening dollar spurred demand for the metal as an alternative investment. Silver advanced to the highest price since 1980.
Libya’s opposition gained fresh support from the U.S. and European nations as leader Muammar Qaddafi sent forces to regain lost territory. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, earlier today fell to the lowest level in more than three months. Gold typically moves inversely to the U.S. currency.
“Prices are up as the dollar weakens slightly and concerns remain that unrest in the Middle East could lead to more significant protests,” John Meyer, an analyst at Fairfax IS in London, wrote in a report today.
Gold futures for April delivery rose as much as $14, or 1 percent, to $1,423.90 an ounce on the Comex in New York, the highest price since Jan. 3. They were at $1,422 at 8:20 a.m. local time after a 5.7 percent gain last month, the most since April. The record was $1,432.50 an ounce on Dec. 7.
The metal for immediate delivery in London was 0.7 percent higher at $1,421.97.
Silver for May delivery in New York was at $34.455 an ounce after rising as much as 1.9 percent to $34.475, the highest price since March 7, 1980. That year futures reached a record $50.35.
Gold rose to $1,414.50 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,411 at yesterday’s afternoon fixing.
Currency Debasement
Concern about rising inflation and currency debasement drove gold prices up 30 percent last year for a 10th annual gain. Increasing food and commodity prices have contributed to uprisings in the Middle East and North Africa.
The European Union yesterday imposed an arms embargo and other sanctions on Libya while the U.S. said it has frozen $30 billion in the country’s assets. The United Nations estimates that more than 1,000 people have died in the uprising. Qaddafi declared that “my people love me.”
Gold and silver “are set for further gains as ongoing Middle East and North Africa turmoil continues to draw strong investment and flight-to-safety demand,” James Moore, an analyst at TheBullionDesk.com in London, said today in a report.
Gold held in exchange-traded products rose 0.84 metric ton to 2,012.16 tons yesterday, data compiled by Bloomberg from 10 providers show. Holdings last week fell to the lowest level since June 4 and reached a record 2,114.6 tons in December. Silver ETP assets slipped 16.54 tons to 14,829.76 tons, data from four providers show.
Palladium for June delivery gained 1.8 percent to $813.75 an ounce. It touched a 10-year high of $863.70 on Feb. 22. Platinum for April delivery was 0.9 percent higher at $1,824.70 an ounce.
To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.
Source: http://www.bloomberg.com/news/2011-03-01/gold-may-extend-best-monthly-gain-in-10-as-middle-east-unrest-spurs-demand.html
