Gold gained for a fifth day as unrest in Libya and the Middle East, and lingering concern over the impact of Japan’s nuclear crisis, combined to fuel demand for the metal as a store of value. Immediate-delivery bullion gained as much as 0.3 percent to $1,431.48 an ounce, near a two-week high of $1,435.01 reached yesterday. It traded at $1,428.16 by 2:44 p.m. in Singapore. Gold futures for April delivery in New York gained 0.2 percent to $1,429 an ounce. 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.” In Japan, Prime Minister Naoto Kan said there is “light at the end of the tunnel” even as smoke at two reactors hampered efforts to restore cooling systems. “The current uncertainties are fertile ground for precious metals,” Eugen Weinberg, Frankfurt-based head of commodity research with Commerzbank AG, wrote in a note to clients. “We expect the price of gold to rise further in the current climate and reach its record level.” Gold advanced to a record $1,444.95 an ounce on March 7 after rallying 30 percent in 2010 on the prospect of rising inflation and currency debasement. The Dollar Index, a six- currency gauge of the greenback’s value, traded near the lowest level since December 2009. Bullion typically moves inversely to the dollar. Dollar Weakness The Group-of-Seven nations last week vowed to curb gains in the yen as the Japanese currency reached a postwar high, endangering the country’s recovery from its biggest recorded earthquake. “Support is also coming from the weak U.S. dollar and expectations that western central banks could use the events in Japan as justification for maintaining their ultra-loose monetary policy,” Weinberg said. Weakness in the dollar will help underpin gold prices should the inverse relationship between the two assets persist, according to Ong Yi Ling, Singapore-based analyst with Phillip Futures Pte Ltd. Still, “should optimism increase that the worse of Japan’s nuclear crisis is over, this could reduce some safe haven demand for gold,” Ong said. Bullion will face resistance at about $1,435 an ounce, Ong said. A resistance level is marked by a cluster of sell orders. Cash silver dropped 0.2 percent to $36.045 an ounce, snapping a two-day, 5.3 percent winning streak. Palladium for immediate delivery was little changed at $747.50 an ounce, while platinum dropped 0.3 percent to $1,740.95 an ounce. To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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