Gold Hits Record and Silver Soars on Dollar Decline
Reuters
Gold rose to a record high for a fourth straight day and silver surged on Friday, as a weaker dollar, the prospect of a U.S. government shutdown and inflation worries lifted precious metals in a broad commodities rally.
Gold was set for its biggest weekly gain in four months, drawing support from renewed euro zone sovereign debt fears amid Portugal's financial crisis and inflation jitters as crude oil and corn hit new highs this week.
Bullion broke above key resistance on technical charts and could target above $1,500 an ounce. The metal has risen more than 10 percent since late January when political unrest began to flare in the Middle East and North Africa.
"With the expected future inflation being higher in this low interest rate environment, investors are more inclined to have some contributions to commodities as an inflation hedge," said Hakan Kaya, commodities portfolio manager at Neuberger Berman, which manages about $190 billion client assets.
Spot gold rose as high as $1,474.19 an ounce and was later up 1 percent at $1,472.20 an ounce by 12:36 a.m. EDT. Bullion was on track to rise 2.5 percent this week for a fourth straight weekly gain. U.S. gold futures for June delivery gained 1 percent to $1,473.60.
Gold remained far below its all-time inflation-adjusted high, estimated at almost $2,500 an ounce set in 1980 as a result of heightened geopolitical pressure and hyperinflation.
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Gold Rises 1%, Trades in Record Territory
Futures are up more than 1% year-to-date and poised for a gain of around 1.9% from Feb. 28.
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Gold Heads for Longest Run of Quarterly Gains in 3 Decades on Libya, Debt
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Gold Advances as Allies Attack Libyan Targets, Boosting Demand for Haven
Bloomberg
Pham-Duy Nguyen
Gold climbed for a fourth straight session, touching the highest price in more than a week, after air strikes in Libya boosted investor demand for the precious metal as an investment haven.
Allied officials said two days of missile and aircraft strikes have effectively grounded Muammar Qaddafi’s air force. The Libyan leader denounced the coalition mounting the attacks, which includes the U.S., the U.K. and France, as “the party of Satan.” Yemen’s President Ali Abdullah Saleh fired his cabinet yesterday and faced a growing internal revolt.
“The gold market is reacting to the fact that Qaddafi hasn’t folded,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “He’s backed into a corner, and if he remains in power under a cease-fire, a significant amount of uncertainty will come out of that region.”
Gold futures for April delivery rose $10.30, or 0.7 percent, to settle at $1,426.40 an ounce at 1:47 p.m. on the Comex in New York. The price, which gained 1.7 percent in the previous three sessions, reached a record $1,445.70 on March 7.
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Obama Budget to Produce $9.5 Trillion Deficit: CBO
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CNBC
The estimate from the nonpartisan Congressional Budget Office says that if Obama's February budget submission is enacted into law it would produce deficits totaling $9.5 trillion over 10 years — an average of almost $1 trillion a year.
Obama's budget saw deficits totaling $7.2 trillion over the same period.
The difference is chiefly because CBO has a less optimistic estimate of how much the government will collect in tax revenues, partly because the administration has rosier economic projections.
But the agency also rejects the administration's claims of more than $300 billion of that savings — to pay for preventing a cut in Medicare payments to doctors — because it doesn't specifying where it would come from. Likewise, CBO fails to credit the White House with an additional $328 billion that would come from unspecified "bipartisan financing" to pay for transportation infrastructure projects such as high speed rail lines and road and bridge construction.
Friday's report actually predicts the deficit for the current budget year, which ends Sept. 30, won't be as bad as the $1.6 trillion predicted by the administration. But 10 years from now, CBO sees a $1.2 trillion deficit that's almost $400 billion above White House projections.
The White House's goal is to reach a point where the budget is balanced except for interest payments on the $14 trillion national debt. Such "primary balance" occurs when the deficit is about 3 percent of the size of the economy, and economists say deficits of that magnitude are generally sustainable.
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Gold Gains on Dollar Drop, Oil Rise, Geopolitics
Reuters
Frank Tang and Amanda Cooper
Gold rose for a fourth day on Monday, buoyed by a weaker dollar, rising oil prices and investor jitters surrounding air strikes by Western powers on Libya and Japan's struggle to avert nuclear disaster.
Gold trimmed initial gains, following oil, but the metal stayed within a whisker of its record $1,444.40 an ounce set on March 7. A 1 percent rise in oil prices was still enough to stoke inflation worries that helped keep gold aloft, analysts said.
Silver soared nearly 3 percent on strong industrial demand and near-term supply tightness, after the metal fell 2 percent last week.
"You can't deny the escalating Middle East problems and the oil price are all supportive factors, but I wonder whether the big jump (in the gold price) is more weaker dollar-related," said Credit Agricole analyst Robin Bhar.
"It's all contributing to the safe-haven bid, and this week is going to be important ... geopolitical risk factors are uppermost in people's minds," Bhar said.
Gold rose 0.6 percent to $1,427.74 an ounce by 12:57 p.m. EDT (1657 GMT), while most-active U.S. April futures gained 0.8 percent to $1,427.80.
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Gold Up as Libya’s Cease-Fire Fails to Calm Waters
Reuters
Frank Tang and Rebekah Curtis
Gold rose for a third straight day on Friday after a unilateral ceasefire declared by Libyan leader Muammar Gaddafi failed to calm investor nerves as political tensions heightened across the Arab world.
Bullion also benefited from a weaker dollar as traders braced for more official action after the G7 nations coordinated to intervene into the yen, and as fresh political unrest was reported in Yemen, Syria, Bahrain and Saudi Arabia.
"It's the concern about what would happen in Libya. Will Gaddafi really stick up to the ceasefire? That's probably the only reason why gold's being bid up at all," said Dennis Gartman, author of the Gartman Letter, a daily investment newsletter.
Gartman, however, said that recent weaker volume suggested gold could lack the conviction to rise further, and the metal's gains on Friday were largely driven by a dollar drop.
Gold rose 1 percent to $1,418.70 an ounce by 12:35 p.m. EDT
Earlier in the session, the metal was little changed after China's central bank raised lenders' required reserves by 50 basis points, a move viewed by some as a confirmation of gold's inflation-hedge appeal.
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Gold Finds Support at $1,410 Amid Libya Unrest
Proactive Investors
Sergei Balashov
Gold prices traded within a narrow range above US$1,410/oz as traders were buying the yellow metal for wealth protection amid turmoil in Libya, which appears to be far from over.
According to the latest reports, the rebels have established control over the east of the country and are approaching capital Tripoli, where pro government forces are currently building defences.
The North African country’s long time rules Muammar Gaddafi has reportedly ordered his security forces to sabotage oil facilities, triggering a surge in oil prices that drove Brent crude to US$119/barrel.
Gold is seen as a safe haven asset and a hedge against inflation.
Gold edged lower after the US Department of Labor said that initial jobless claims dropped 22,000 to 391,000 last week, prompting investors to go for riskier assets.
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Gold Tops $1,400, Silver Surges to 30-Year High on Haven Demand
Bloomberg
Nicholas Larkin and Pham-Duy Nguyen
Gold topped $1,400 an ounce in New York and silver surged to the highest in 30 years as unrest in the Middle East boosted demand for precious metals as a haven.
The Libyan government attacked protesters, and rebels claimed control of the second-biggest city, Benghazi. Tens of thousands of Bahraini protesters marched in the capital demanding democracy. Gold has rallied 26 percent in the past year, while silver doubled.
“Geopolitical tensions in the Middle East and North Africa region continue to fester, keeping risk aversion elevated and enhancing the appeal of safe-haven assets,” Marc Ground, an analyst at Standard Bank Plc in Johannesburg, said in a report.
Gold futures for April delivery rose $12.50, or 0.9 percent, to settle at $1,401.10 at 1:51 p.m. on the Comex. The metal reached a record of $1,432.50 on Dec. 7. The Comex was closed yesterday for a holiday.
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