Gold touched a record high above $1,440 an ounce on Wednesday, as a bullish confluence of political unrest in Libya, surging oil prices and easy monetary policies spurred safe haven buying.
Gold has rallied 10 percent since late January when tensions first began to flare in the Middle East and Africa. Muammar Gaddafi on Wednesday launched a land and air offensive to retake territory from rebels in Libya's eastern region, and the possibility of a prolonged civil war fueled bullion demand as a hedge against uncertainty.
"You have political problems all over the world, a Federal Reserve bank that still erred on the side of easing rather than tightening, rising commodities prices in general, and growing disdain for fiat currencies generally," said Dennis Gartman, author of the Gartman Letter, an daily investment newsletter.
"It will be illogical for gold not to be going higher," he said.
Spot gold hit a session peak $1,440.10 an ounce, a record for the second straight day. It later eased about $1 to $1,432.55 an ounce by 2:29 p.m. EST (1929 GMT). The metal was fixed at $1,435.50 an ounce in London.
U.S. gold futures for April delivery settled up $6.50 at $1,437.70.
Gold is building on a 6 percent rise in February, its biggest one-month climb since August, triggered by unrest across the Arab world which unseated leaders in Tunisia and Egypt before spreading to Libya, Bahrain, Yemen, Oman and Iran.
Two U.S. warships were passing through the Suez Canal, heading for the waters off Libya to pressure the country's ruler to step down.
Meanwhile, two Iranian naval ships, whose passage through the Suez Canal to the Mediterranean last month was described by Israel as a "provocation", will return via the canal to the Red Sea on Thursday.
At a meeting of Arab foreign ministers in Cairo on Wednesday, Iraqi Foreign Minister Hoshiyar Zebari said the Libya crisis is an internal Arab affair and foreign powers should refrain from any intervention.
Gold hits record above $1,440 on Libya unrest, oil
Thursday, March 03, 2011
nithu
