Gold Rises to Record on Liyban Turmoil, Surge in Oil Prices; Silver Gains - Bloomberg

Gold futures climbed to a record for the third time in a week as escalating violence in Libya and concern that inflation will accelerate boosted demand for the metal as an investment haven. Silver rose to a 31-year high.

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. more ...