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Gold Futures Advance, Capping Longest Series of Quarterly Gains Since 1975

Gold futures rose, capping the longest streak of quarterly gains in more than three decades, as fighting in Libya and European-debt concerns spurred demand for the metal as an alternative investment. Silver also gained.

Gold futures for June delivery advanced $15, or 1.1 percent, to close at $1,439.90 an ounce at 1:53 p.m. on the Comex in New York, a record settlement. This quarter, the metal climbed 1.3 percent, marking the 10th straight gain, the longest rally since at least 1975. On March 24, the commodity reached $1,448.60, the highest intraday price ever.

The defection of a top aide to Muammar Qaddafi shows that the regime is disintegrating, U.K. Prime Minister David Cameron said. The western Libyan city of Misrata faced “heavy shelling and heavy artillery fire by Qaddafi forces throughout the night,” a rebel spokesman told BBC World Service radio. Irish regulators instructed four banks to raise $34 billion in additional capital following stress tests.

“Given the unrest in the Middle East and North Africa region, increasing debt issues in the euro zone and the environment of historically low interest rates, gold and silver should continue to remain underpinned and test toward recent highs,” James Moore, an analyst at TheBullionDesk.com in London, said in a report.

European inflation unexpectedly accelerated to 2.6 percent in March, the fastest in more than two years, the European Union’s statistics office said today.

Gold and silver are being supported by “inflation, geopolitical and euro zone debt concerns,” GoldCore Ltd. in Dublin said in a report.

U.S. Economy

Gains in gold were limited this quarter on signs that the U.S. economy is improving, boosting investor appetite for equities.

Silver futures for May delivery rose 37.7 cents, or 1 percent, to $37.888 an ounce. This quarter, the price gained 22 percent, marking the ninth straight gain, the longest rally since at least 1975.

On March 24, the price reached $38.18, the highest since February 1980. In that year, the metal climbed to a record of $50.35. In the past 12 months, the commodity has more than doubled.

“Increasing global investment and industrial demand in the very small and finite silver-bullion market is a recipe for higher prices,” GoldCore said. With gold near a record, “silver is the cheap alternative and an attractive store of value,” the company said.

Palladium futures for June delivery rose $9.80, or 1.3 percent, to $767.90 an ounce. This quarter, the metal dropped 4.4 percent after almost doubling in 2010.

Platinum futures for July delivery gained $9.10, or 0.5 percent, to $1,783.20 an ounce. This quarter, the price rose 0.3 percent after climbing 16 percent in the second half of 2010.

To contact the reporters 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.

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