Gold price surges on Middle East unrest

Gold climbed above $US1400 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 February 18 it would raise reserve requirements for lenders as of February 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 $US18.08, or 1.3 per cent, to $US1407.60 an ounce, the highest price since January 4, and was at $US1407.52 in London. Prices gained for a sixth day, the longest streak since August. The metal for April delivery was 1.4 per cent higher at $US1408 on the Comex in New York.

Silver for immediate delivery gained as much as 4.1 per cent to $US33.9775 an ounce, the highest price since March 1980.

Bullion rose to $US1403 an ounce in the afternoon "fixing" in London, used by some mining companies to sell output, from $US1399.50 at today's morning fixing.

(Source: http://www.brisbanetimes.com.au/business/markets/gold-price-surges-on-middle-east-unrest-20110222-1b2uf.html)