Gold May Advance as Libyan Fighting Fuels Demand
Source: Bloomberg, Nicholas Larkin (3/30/11)
"Crisis in Libya is 'far from over,' and neither is gold's run."
Libyan rebels' westward advance on Sirte stalled under fire from Muammar Qaddafi's troops. Standard & Poor's yesterday cut credit ratings for Greece and Portugal. Gold futures reached a record $1,448.60 an ounce on March 24 as fighting in Libya, the Japanese nuclear crisis and concerns about European debt boosted demand for a protection of wealth.
"It is certainly the geopolitical factors which are still playing a role," said Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany. "The situation in Libya is quite open and far from over."
Gold futures for June delivery rose $2.40, or 0.2%, to $1,419.90 an ounce by 12:02 p.m. on the Comex in New York. Prices are little changed this quarter after gaining the previous nine quarters, the best run of gains since at least 1975. The metal for immediate delivery in London was little changed at $1,418.95.
Pro-Qaddafi forces retook control of the oil port of Ras Lanuf, forcing the rebels to abandon their positions and flee east, Agence France-Presse reported, as President Barack Obama said he may consider sending arms to the opposition forces. The fighting in Libya is the most violent seen in more than two months of popular uprisings across the Middle East and North Africa.