Investors continued to embrace the perceived safety of gold as prices on Monday soared to new heights. Against a New York close on Friday of $1,431.95, it rose to $1,442.70 in early trading. April gold futures in the U.S. were up $12.50 per ounce to $1,441.10, after hitting a high of $1,443.30. Silver, too, reached levels not seen in more than 30 years.
Reuters reported that Walter de Wet, a Standard Bank analyst, said of the rise, "There is all sorts [of reasons] to support gold—high oil prices, low real interest rates, and the fact that there are constant reminders that we still have debt problems in Europe." U.S. crude had risen on fighting in Libya to a 30-month high, to top $106 per barrel; that was an increase of more than $2 per barrel. Brent crude topped $118 per barrel, also up more than $2.
Peter Fertig, a consultant at Quantitative Commodity Research, said in the report, "The energy complex has not only a high weighting in commodity price indices, but also in consumer price indices. Therefore, the surge of oil prices will have an impact on CPI inflation." He added, "As gold has the reputation to serve as a hedge against inflation, the fear of rising inflation rates is another factor supporting gold and other precious metals."
Asian demand for gold has stayed high, with the retail price in Japan for the precious metal hitting a 28-year high at more than 4,000 yen ($48.60) per gram. Indian demand was also strong, driving that nation’s gold futures to new records as well.
As high as gold has soared, silver has proportionately risen even more; it hit $36.58 per ounce in early trading, its highest price since early 1980. As an indication of silver’s outperformance, the gold/silver ratio fell below 40:1 for the first time since February of 1998. James Moore, analyst at TheBullionDesk.com, said, "With the situation in the [Middle East/North Africa] MENA region still extremely volatile and oil continuing [to] rise, both gold and silver are likely to extend on a mix of safe-haven and anti-inflationary hedging."
Platinum hit $1,836.50 per ounce; palladium went to $812.97.