Gold Trades Near Record as Libyan Conflict Sustains Oil, Stoking Inflation

Gold traded near a record as escalating turmoil in Libya, coupled with concern that inflation is rising, bolstered demand for the metal as a store of value.

Immediate-delivery bullion traded little changed at $1,432.97 an ounce at 9:26 a.m. inSingapore after climbing to an all-time high of $1,444.95 an ounce yesterday. The April- delivery contract in New York was also little changed at $1,433.20 an ounce. Oil retreated from a 29-month high.

“There are healthy sales that allow the market to take a break after a recent bull run,” said Chae Un Soo, a Seoul-based trader with KEB Futures Co. “There’s great buying interest in the metal unless the picture in the Middle East gets better.”

Libyan rebels moved along the coast toward Tripoli and government troops loyal to Muammar Qaddafi escalated their use of force. 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.

The United Nations estimated as of Feb. 26 that 1,000 people had died since the Libyan uprising began in mid-February. In Saudi Arabia, websites have called for a nationwide “Day of Rage” on March 11 and March 20, according to Human Rights Watch.

Gold rallied 30 percent last year as the prospect of rising inflation and currency debasement spurred demand for a haven.

Chinese Premier Wen Jiabao told the annual National People’s Congress in Beijing on March 5 that reining in inflation is the nation’s top priority. Federal Reserve Chairman Ben S. Bernankehas signaled that the Fed will complete $600 billion of Treasury purchases through June.

Cash silver was little changed at $35.9463 an ounce after soaring as much as 3.2 percent yesterday to $36.7525, the highest level since 1980. Palladium for immediate delivery added 0.3 percent to $791 an ounce and platinum fell 0.7 percent to $1,806.75 an ounce.

(Source: http://www.bloomberg.com/news/2011-03-08/gold-trades-near-record-as-libyan-conflict-sustains-oil-stoking-inflation.html)