Gold Rises to Record on Liyban Turmoil, Surge in Oil Prices; Silver Gains
Gold climbed to a record in London and New York as escalating violence in Libya and concern inflation will accelerate boosted demand for the metal as an alternative asset. Photographer: Dario Pignatelli/Bloomberg
Gold reached an all-time high of $1,445.70 an ounce as Libyan rebels moved along the coast toward Tripoli and government troops loyal to Muammar Qaddafi escalated their use of force. Crude oil extended a rally to a 29-month high in New York on concern that turmoil will spread to Middle East producers.
“The gold market is eyeing oil,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “The concern is that the unrest will spill over to Saudi Arabia as an ever-expanding world is using more and more oil every day.”
Gold futures for April delivery rose $5.90, or 0.4 percent, to settle at $1,434.50 at 1:32 p.m. on the Comex in New York. Last week, the metal climbed 1.4 percent, extending a rally to six weeks, the longest since September 2007.
Silver futures for May delivery rose 53.8 cents, or 1.5 percent, to $35.865 an ounce. Earlier, the price reached $36.745, the highest for a most-active contract since March 1980. That year, the metal climbed to a record of $50.35.
Saudi Arabia is the biggest oil producer in the Organization of Petroleum Exporting Countries. Surging food and commodity prices contributed to unrest that toppled leaders in Tunisia and Egypt with protests erupting in countries including Iran, Yemen and Oman.
Saudi ‘Rage’
The United Nations estimated as of Feb. 26 that 1,000 people had died since the Libyan uprising began in mid-February. In Saudi Arabia, websites have called for a nationwide “Day of Rage” on March 11 and March 20, according to Human Rights Watch.Chinese Premier Wen Jiabao told the annual National People’s Congress in Beijing on March 5 that reining in inflation is the nation’s top priority. Federal Reserve Chairman Ben S. Bernanke has signaled that the Fed will complete $600 billion of Treasury purchases through June.
“You have an environment where you have rising inflation and increasing liquidity,” Juerg Kiener, the chief investment officer at Swiss Asia Capital Ltd. in Singapore, said in an interview on Bloomberg Television. “We have a very large physical position of gold and silver in the market.”
Gold has gained 26 percent in the past 12 months, and silver more than doubled. The MSCI World Index of equities was up 14 percent.
Palladium futures for June delivery fell $19.70, or 2.4 percent, to $790.10 an ounce on the New York Mercantile Exchange.
Platinum futures for April delivery dropped $17.50, or 1 percent, to $1,820.40 an ounce.
Palladium has climbed 66 percent in the past 12 months, and platinum is up 15 percent.
To contact the reporters on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: Patrick McKiernan at pmckiernan@bloomberg.net
