Gold may gain in New York, extending the longest weekly run in more than three years, as turmoil in Libya and concern inflation will accelerate boost demand for an alternative investment. Libyan opposition leaders rejected a mediation offer by Venezuelan President Hugo Chavez as armed rebels fought for control of oil ports on the country’s central and eastern coastal strip. Gold fell the most in six weeks yesterday after reaching a record $1,441 an ounce on March 2. “The situation in the Middle East and North Africa is really tense and there’s a lot of uncertainty,” said Bernard Sin, the head of currency and metal trading at MKS Finance SA, a bullion refiner in Geneva. While there’s been “haven” buying, “physical demand has slowed down a little bit” because of higher prices, he said. Gold futures for April delivery rose $2.10, or 0.1 percent, to $1,418.50 an ounce at 8 a.m. on the Comex in New York. They’re up 0.7 percent this week, set for a sixth weekly advance, the longest run since September 2007. The metal for immediate delivery in London was 0.2 percent higher at $1,418.28. Gold fell to $1,418 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,421.50 at yesterday’s afternoon fixing. Futures slipped 1.5 percent yesterday as the Arab League held talks with Venezuela about Chavez’s call for a “mediation commission.” Opposition spokesman Mustafa Gheriani said “we do not accept any negotiations” with Libyan leader Muammar Qaddafi, according to the Associated Press. Toppled Leaders 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. Increasing food and commodity prices have contributed to unrest that toppled leaders in Tunisia and Egypt, with protests also erupting in Yemen, Bahrain, Oman, Jordan, Algeria, Morocco, Iran and Iraq. As oil has climbed above $100 a barrel in New York, mounting inflation pressures in Europe prompted European Central Bank President Jean-Claude Trichet yesterday to say the ECB may raise rates next month for the first time in almost three years. “Why on earth would anyone sell gold now, with the Middle East situation still very uncertain, and all the monetary reasons to hold gold still intact?” said Adrian Day, president of Adrian Day Asset Management. “Inflation is slowly rising.” Silver for May delivery in New York was up 0.3 percent at $34.44 an ounce after climbing to $34.975 on March 2, the highest price since March 7, 1980. That year futures reached a record $50.35. Palladium for June delivery fell 0.6 percent to $810.20 an ounce. It touched a 10-year high of $863.70 on Feb. 22. Platinum for April delivery was 0.1 percent lower at $1,830.30 an ounce. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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