Gold Advances for Second Straight Day as Demand Mounts for Inflation Hedge

Gold rose the most in a week on speculation that higher raw-material costs and record-lowinterest rates will spur demand for an inflation hedge. Silver had the biggest gain this year.

U.S. wholesale costs increased 0.7 percent in March, led by surging energy, the government said. Compared with a year earlier, prices climbed 5.8 percent. Gold has gained 27 percent in the past year, reaching a record $1,478 an ounce on April 11.

“We are seeing increasing inflationary expectations, and investors are putting on hedges,” saidMatthew Zeman, a strategist at Kingsview Financial in Chicago. “Gold is catching a nice bid.”

Gold futures for June delivery rose $16.80, or 1.2 percent, to settle at $1,472.40 at 1:42 p.m. on the Comex in New York, the biggest gain for a most-active contract since April 5.

Silver futures for May delivery rose $1.427, or 3.5 percent, to $41.664 an ounce. The gain was the biggest since Dec. 28. On April 11, the price reached $41.975, the highest since 1980. In that year, the metal reached a record $50.35.

Palladium futures for June delivery gained $8.95, or 1.2 percent, to $774.25 an ounce on theNew York Mercantile Exchange.

Platinum futures for July delivery climbed $18.40, or 1 percent, to $1,795.60 an ounce.

(Source: http://www.bloomberg.com/news/2011-04-14/gold-advances-for-second-day-on-demand-for-inflation-hedge-silver-jumps.html)