Gold Rises to Record on Mideast Unrest
Source: Reuters, Frank Tang and Jan Harvey (3/2/11)
"Libyan unrest and surging oil prices prompted investors to pile in."
Unrest across the Middle East and North Africa, which unseated leaders in Tunisia and Egypt before spreading to Libya, Bahrain, Yemen, Oman and Iran, fueled safe-haven buying on fears that tensions could flare across the entire region.
"You have political problems all over the world, a Federal Reserve bank that still erred on the side of easing rather than tightening, rising commodities prices in general, and growing disdain for fiat currencies generally," said Dennis Gartman, author of the Gartman Letter, a daily investment newsletter.
"It will be illogical for gold not to be going higher," he said.
Two U.S. warships were passing through the Suez Canal on Wednesday, heading for the waters off Libya to pressure that country's ruler, Muammar Gaddafi, to step down. Gaddafi launched a land and air offensive to retake territory from rebels in Libya's eastern region.
At a meeting of Arab foreign ministers in Cairo on Wednesday, Iraqi Foreign Minister Hoshiyar Zebari said the Libya crisis is an internal Arab affair and foreign powers should refrain from any intervention.
Spot gold rose 0.4% to $1,439.19 an ounce by 12:00 p.m. EST, after peaking at an all-time high of $1,440.10. The metal fixed at $1,435.50 an ounce in London.
U.S. gold futures for April delivery rose $7.90 to $1,439.10.
Gold is building on a 6% rise in February, its biggest one-month climb since August.