Gold futures rose to a one-week high after energy costs climbed, boosting the appeal of the precious metal as a hedge against inflation. Silver extended a rally to the highest since 1980.
Crude-oil futures rose as much as 3.2 percent today after climbing by the same amount last week. Gold surged 31 percent last year as consumer prices rose the most since 1990, sparked by a 57 percent gain in oil prices.
``Gold prices are responding to the surge in energy prices,'' said Tom Hartmann, a commodity analyst at Altavest Worldwide Trading Inc. in Mission Viejo, California. ``There's a bit of anxiety in the market. Higher crude prices have always been supportive of gold during this bull market.''
Gold futures for April delivery increased $4.40, or 0.5 percent, to $926.70 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, the price reached $931, the highest for a most-active contract since Feb. 1. The metal has gained 11 percent this year.
Silver futures for March delivery jumped 36 cents, or 2.1 percent, to $17.47 an ounce. Earlier, the price reached $17.595, the highest since December 1980. The metal has climbed 17 percent this year.
Crude oil climbed as high as $94.72 a barrel. Valero Energy Corp. shut a Delaware refinery because of a power failure late yesterday. Venezuela, the U.S.'s fourth-biggest source of oil, also threatened to halt shipments. The price reached a record $100.09 a barrel on Jan. 3.
Gold's gains were limited after the Group of Seven officials meeting in Tokyo said they supported the International Monetary Fund's effort sell its gold reserves in order to invest in higher-yielding assets.
``The mere announcement is bearish of gold,'' said Dennis Gartman, economist and editor of the Suffolk, Virginia-based Gartman Letter.
The IMF is the third-largest holder of gold reserves behind the central banks of the U.S. and Germany. The IMF has 3,217 metric tons of gold in its reserves, according to the World Gold Council.
Courtesy - Bloomberg.com
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