Gold Surges To Record On Libya, Political Unrest

Gold rose more than 1 percent to an all-time high on Tuesday above
$1,432 an ounce as chaos in Libya and political turmoil in the Arab
world prompted safe-haven buying and soaring oil prices boosted
bullion’s inflation hedge appeal.

Unrest across the Middle East and North Africa, which unseated
leaders in Tunisia and Egypt before spreading across Libya, Bahrain,
Yemen and Iran, fueled a 6 percent rise in gold prices in February.

“What gold needed was a catalyst, and it found it in the form of
tensions that are surfacing in the Middle East and rising oil prices,
which served as an inflationary threat and also led to political
instability,” said Mark Luschini, chief investment strategist of Janney
Montgomery Scott, a brokerage that manages $53 billion in client assets.

On Tuesday, Iranian security forces fired teargas and clashed with
anti-government demonstrators protesting the treatment of opposition
leaders. The United States said Libya could descend into civil war if
Muammar Gaddafi refuses to quit, after word of unspecified Western
military preparations.

Gold has rallied strongly since political unrest sent U.S. light
sweet oil futures soaring nearly $3 to just under $100 a barrel, driven
by worries about supply disruptions. Global stocks dipped as oil’s surge
fanned concerns about a dampening effect on economic growth.

Spot gold rallied to a record of $1,432.10 an ounce, surpassing its
previous record of $1,430.95 set on December 7. The metal gained 1.4
percent to $1,430.69 an ounce by 2:50 p.m. EST (1950 GMT), extending its
winning streak to three consecutive trading days.

U.S. April gold futures settled up 1.5 percent at $1,431.2 an ounce.