SF: Gold, Near Record, May Gain on Libya, Debt Concern, Japan Crisis
March 25 (Bloomberg) -- Gold, which reached a record yesterday, may climb in London as fighting in Libya, debt concerns in Europe and a nuclear crisis in Japan spur demand for an alternative investment. Silver was near a 31-year high.
The coalition against Muammar Qaddafi is striking Libyan government forces that continue to attack civilians in some coastal cities. Japan's nuclear regulator said one reactor core at the damaged Fukushima Dai-Ichi power plant may be cracked and leaking radiation. Concern that Portugal may need a bailout yesterday helped push gold to a record $1,447.82 an ounce.
"There is just too much uncertainty at the moment and gold should hold near recent highs," Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report. "Geopolitical concerns in addition to growing uncertainty over Portugal's debt crisis supported bullion."
Immediate-delivery bullion rose $2.67, or 0.2 percent, to $1,433.32 an ounce by 9:56 a.m. in London. Prices are up 1 percent this week. Gold for April delivery was 0.1 percent lower at $1,433.40 an ounce on the Comex in New York.
Portugal continued to rule out a bailout, which two officials with direct knowledge of the matter said may total between 50 billion euros ($71 billion) and 70 billion euros. Fitch Ratings and Standard & Poor's yesterday downgraded the country.
The North Atlantic Treaty Organization agreed to take command of the Libya no-fly zone, stopping short of assuming responsibility for airstrike missions against Libyan ground forces. Foreign ministers from coalition nations plan to meet March 29 in London to discuss Libya issues.
Yemen Protests
In Yemen, the political opposition to President Ali Abdullah Saleh announced plans for nationwide protests against the state of emergency passed by Saleh's loyalists in parliament this week. Syria announced steps in response to protests, including a possible end to 48-year emergency rule that suspended most rights. Concern about oil supply from the region has pushed the fuel above $100 a barrel in New York.
"Throw ongoing problems within the Middle East and North Africa into the mix, plus an escalating oil price, and further debt problems in Europe, and you have the perfect scenario for further strong gold prices," said Gavin Wendt, founding director with MineLife Pty.
Repair work at Japan's Fukushima Dai-Ichi plant damaged after the March 11 earthquake and tsunami has been plagued by explosions, fires and leaks of toxic material. Two plant workers were hospitalized yesterday with radiation burns. Tokyo authorities were handing out bottled water after determining that tap water may be unsafe for babies.
Seventeen of 19 traders, investors and analysts surveyed by Bloomberg, or 89 percent, said bullion will rise next week. Two predicted lower prices.
Silver for immediate delivery gained 0.8 percent to $37.435 an ounce after yesterday reaching $38.165, the highest level since February 1980. That year the metal reached a record $50.35 in New York.
Palladium was down 0.3 percent at $749.25 an ounce. Platinum declined 0.5 percent to $1,746 an ounce.
