Immediate-delivery bullion fell as much as 0.4 percent to $1,422.95 an ounce before trading at $1,425.25 at 2:02 p.m. in Singapore. The metal climbed to an all-time high of $1,444.95 on March 7. The April-delivery contract in New York was little changed at $1,425.40. Oil decreased as much as 81 cents to $104.21 a barrel in New York.
“For gold prices to trend higher and reach another record high, we need a steady news flow of escalating violence in the Middle East,” said Ong Yi Ling, a Singapore-based analyst with Phillip Futures Pte. “More importantly, oil prices will have to head higher, increasing inflationary concerns.”
Kuwait’s oil minister said members of the Organization of Petroleum Exporting Countries are weighing an “urgent” meeting to determine whether more output is needed, as Libyan rebel fighters prepared an offensive to regain a town lost to Muammar Qaddafi’s forces.
Increasing food and commodity prices have contributed to unrest that toppled leaders in Tunisia and Egypt, with protests also erupting in countries including Iran, Yemen and Oman.
Concern about rising inflation and currency debasement drove gold prices up 30 percent last year for a 10th annual gain. Asian countries from China to Indonesia raised interest rates this year to curb rising consumer prices.
‘Temporary Nature’
The dip from the record high is “likely to be of a temporary nature,” Eugen Weinberg, Frankfurt-based head of commodity research with Commerzbank AG, wrote in a report. “As the situation worsens in Libya, investors are shifting more and more from riskier commodities such as base metals to more stable investments such as precious metals.”
Gold held in exchange traded products, or ETPs, rose for a fourth day to 2,024.628 metric tons yesterday, data compiled by Bloomberg from 10 providers show. Holdings reached a record 2,114.6 tons in December.
“As the precious metals and base metals correct back from recent highs, gold and silver are holding their ground,” Jordan Kotick, New York-based head of global technical strategy with Barclays Capital, said in a note to clients. “We are bullish and would view any dip as an opportunity to go long.”
Cash silver declined 0.4 percent to $35.9063 an ounce. The metal touched $36.7525 on March 7, the highest level since 1980. Palladium for immediate delivery rose 0.2 percent to $793 an ounce and platinum retreated 0.4 percent $1,799 an ounce.
To contact the reporter on this story: Kyoungwha Kim in Singapore at
To contact the editor responsible for this story: James Poole a
soucer:http://www.bloomberg.com/news/2011-03-09/gold-may-advance-approaching-record-as-middle-east-turmoil-buoys-demand.html
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