Gold Rises Above $1,400 on Middle East Unrest; Silver Advances
Gold climbed above $1,400 an ounce to the highest price in almost seven weeks in London as unrest in the Middle East and concern inflation will quicken boosted demand. Silver reached a 30-year high and palladium advanced.
Libyan leader Muammar Qaddafi’s son Saif al-Islam Qaddafi called on protesters to engage in dialogue or face a civil war that risks “hundreds of thousands of dead.” In the latest step to curb inflation, China’s central bank said Feb. 18 it would raise reserve requirements for lenders as of Feb. 24 after boosting interest rates earlier this month.
“The mix of Middle Eastern jitters and inflation concerns continues to create a favorable price environment for the precious metals, particularly gold and silver,” James Moore, an analyst at TheBullionDesk.com in London, said in a report.
Immediate-delivery bullion added as much as $18.08, or 1.3 percent, to $1,407.60 an ounce, the highest price since Jan. 4, and was at $1,407.52 at 4:52 p.m. in London. Prices gained for a sixth day, the longest streak since August. The metal for April delivery was 1.4 percent higher at $1,408 on the Comex in New York.
Silver for immediate delivery gained as much as 4.1 percent to $33.9775 an ounce, the highest price since March 1980.
Bullion rose to $1,403 an ounce in the afternoon “fixing” in London, used by some mining companies to sell output, from $1,399.50 at today’s morning fixing.
Gold reached a record $1,431.25 an ounce on Dec. 7. Concern about rising inflation and currency debasement drove prices up 30 percent last year for a 10th annual gain. Rising food and commodity prices have contributed to uprisings in the Middle East.
Libyan security forces yesterday attacked anti-government protesters in Benghazi, the nation’s second-largest city. The North African country has become the focal point of region-wide protests ignited by the ouster of Tunisia’s president last month and energized by the fall of Egyptian President Hosni Mubarak on Feb. 11. Violence has also flared in Yemen, Djibouti and Bahrain.
“Gold, silver, platinum and palladium are all riding on investor interest against the backdrop of intensifying violence in the Middle East,” said Hwang Il Doo, Seoul-based senior trader with KEB Futures Co. “I wouldn’t be surprised to see gold rising above $1,500 in the coming month.”
Silver advanced to its most expensive level versus gold in 13 years. An ounce of gold bought as little as 41.45 ounces of silver today, the lowest amount since February 1998. Silver has more than doubled in the past year and was last up 4 percent at $33.9625 an ounce.
Palladium for immediate delivery in London rose 1.1 percent to $860.15 an ounce after reaching $862.05, the highest level since February 2001. Platinum was 1 percent higher at $1,852.65 an ounce. Comex floor trading in New York is closed today for Presidents’ Day.
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