Gold, silver rally on concerns over energy prices

NEW YORK – Gold and silver prices ended the week higher as uncertainly over energy prices and political instability in the Middle East drove investors out of the stock market.

Gold and silver are playing a familiar role, offering what investors consider to be a relatively safe asset during times of turmoil. Continued fighting in Libya, rising oil prices and the threat of inflation all helped fuel a rally in gold and silver.

The Dow Jones Industrial Average fell 88 points Friday despite news that the unemployment rate dropped to 8.9 percent in February as the economy added 192,000 jobs. At the same time, oil prices hit their highest level since 2008 and tensions in Libya escalated as forces loyal to Moammar Gadhafi used tear gas to repel protesters in Tripoli

"The Middle East is still a factor. There are some safe haven (investment) flows going into the precious metals," said Tom Pawlicki, commodities analyst with MF Global Research in Chicago.

Gold for April delivery rose $12.20 to settle at $1,428.60. Silver for May delivery rose $1 to settle at $35.327 an ounce.

Industrial metals fell as economic uncertainty dimmed the outlook for commodities that are used in manufacturing.

Copper fell 0.3 cents to settle at $4.472 a pound. Palladium lost $5 to settle at $809.80 an ounce. Platinum rose $4.90 to $1,837.90 an ounce.

Oil prices ended the week at a 29-month high as fighting in Libya intensified. Most of Libya's oil production has been shut down because of the crisis, and experts say the country's oil fields will be threatened as long as there's no clear leader in charge.

Rebels also attacked the oil port of Ras Lanouf, about 380 miles east of Tripoli. They battled with about 3,000 pro-Gadhafi troops, mainly around the facility's airstrip. As night fell it was not clear who was in control of the complex. Earlier in the week, rebels pushed back Gadhafi forces from a larger oil facility.

The Energy department said this week that petroleum demand has grown for four straight weeks, resulting in unexpected drops in the nation's oil and gasoline supplies last week.

Benchmark oil for March delivery rose $2.51 cents to settle at $104.42 a barrel on the New York Mercantile Exchange.

In other Nymex trading, heating oil gained 4 cents to settle at $3.0893 per gallon, gasoline rose 2.02 cents to settle at $3.0464 per gallon and natural gas gained 3.1 cents to settle at $3.809 per 1,000 cubic feet.

Grains and beans were mixed. In May contracts, wheat gained 8.75 cents to settle at $8.3225 a bushel, corn lost 8.75 cents to settle at $7.28 a bushel and soybeans rose 2 cents to settle at $14.14 a bushel.

(Source: http://news.yahoo.com/s/ap/20110304/ap_on_bi_ge/us_commodities_review_4)