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March 07, 2011 at 10:39 AM
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."
