Gold, silver records on inflation risks
8:13 PM
Unknown
Gold, silver records on inflation risks
Gold climbed, approaching a record, as violence intensified in the Middle East and oil continued to gain, driving demand for precious metals as a hedge against uncertainties and inflation. Silver reached a 31-year peak.
Immediate-delivery bullion gained 0.5 per cent to $US1,437.85 an ounce at 11:32 a.m. Singapore time. The metal climbed to an all-time high of $US1,440.32 on March 2. April-delivery futures in New York strengthened 0.7 per cent to $US1,437.90. Oil surged to the highest level in 29 months.
“Rising oil prices and escalating clashes in Libya and tensions in other key Middle Eastern countries continued to support safe-haven buying for precious metals,” Mark Pervan, analyst at ANZ, wrote in a report today.
Concern about rising inflation and currency debasement drove gold prices up 30 per cent last year for a 10th annual gain. Asian nations from China to Indonesia raised interest rates this year to curb rising consumer prices. Increasing food and commodity prices have contributed to unrest that started in Tunisia in January and spread to Egypt, Bahrain, Iran and Yemen.
Fighting between Libyan rebels and troops loyal to Muammar Gaddafi intensified as the opposition advanced west from the oil hub of Ras Lanuf toward the leader's hometown of Sirte. Some websites call for a nationwide “Day of Rage” in Saudi Arabia on March 11 and March 20.
“A civil war could be the unfortunate outcome and normal oil production from Libya may not be restored in the short term,” said Ong Yi Ling, Singapore-based analyst with Phillip Futures Pte Ltd. “Besides Libya, investors may also watch the situation in Saudi Arabia closely. Should the turmoil spread to the world's largest oil exporters, we could witness spikes in oil and gold prices.”
Rising inflation
Fifteen of 17 traders, investors and analysts surveyed by Bloomberg, or 88 per cent, said the metal will rise this week. Two predicted lower prices.
Hedge-fund managers and other large speculators increased their net-long positions in New York gold futures in the week ended March 1, according to US Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 197,253 contracts on the Comex division of the New York Mercantile Exchange, the Washington- based commission said in its Commitments of Traders report. Net- long positions rose by 16,829 contracts, or 9 per cent, from a week earlier.
Treasury purchases
European Central Bank President Jean-Claude Trichet said last week that the ECB may raise interest rates next month to fight accelerating inflation pressures. Federal Reserve Chairman Ben Bernanke has signaled he will keep the Fed on course to finish $US600 billion of Treasury purchases through June.
“Basically you have an environment where you have rising inflation and increasing liquidity,” Juerg Kiener, chief investment officer at Swiss Asia Capital in Singapore, said in an interview with Bloomberg Television. “We have a very large physical position of gold and silver in the market.”
Cash silver increased as much as 2.1 per cent to $US36.3675 an ounce, the highest level since February 1980. Palladium added 0.8 per cent to $US818.50 an ounce and platinum for immediate delivery was little changed at 0.1 per cent at $US1,844.38.
Bloomberg News
Posted in 
Subscribe to:
Post Comments (Atom)
No Response to "Gold, silver records on inflation risks"
Post a Comment