Gold climbed to a record, heading for the biggest weekly gain this year, as concern over accelerating inflation, financial turmoil in Europe and fighting in Libya bolstered demand. Silver gained to a 31-year peak. Immediate-delivery bullion strengthened as much as 0.6 percent to $1,466.10 an ounce before trading at $1,465.07 at midday in Singapore. The metal has risen 2.6 percent this week, the most since the week ended Dec. 31. Gold for June delivery in New York climbed as much as 0.6 percent to $1,467.50 an ounce, also a record. “Inflation concerns took the driver’s seat, fueling demand for precious metals,” said Lim Chae Myung, a Seoul-based trader at Hyundai Futures Co. “There’s no clear-cut improvements in Europe, the Middle East and Japan. The favorable climate for gold will continue.” The European Central Bank yesterday lifted interest rates for the first time in almost three years to quell inflation even as Portugal sought a bailout, becoming the third euro-region country to need a rescue. China this week increased interest rates to combat rising prices. The fighting in Libya, where rebels are trying oust leader Muammar Qaddafi, and the aftermath of Japan’s March 11 quake also helped push gold to a record. Fifteen of 18 traders, investors and analysts surveyed by Bloomberg, or 83 percent, said that bullion will rise next week, driven by concerns about European sovereign debt and inflation. Two predicted lower prices and one was neutral. Silver Demand Gold will average $1,460 this year, up from a previous forecast of $1,426, Standard Chartered Plc said yesterday in a report. Prices will average $1,650 next year, the bank said. Assets in exchange-traded products stood at 2,029.17 metric tons as of yesterday, data compiled by Bloomberg from 10 providers show. Holdings reached a record 2,114.6 tons in December. “There are so many reasons to buy gold now,” said Masahiro Yamazaki, a Tokyo-based trader with Mitsubishi Corp. “Inflation is the big worry at the moment. We see new money coming in.” Demand for precious metals has strengthened as investors seek to preserve their wealth against the worsening outlook for inflation. Silver demand climbed 15 percent to the highest level in at least 20 years in 2010, researcher GFMS Ltd. said. The Standard & Poor’s GSCI Spot Index of 24 raw materials climbed to its highest level since August 2008 today. Copper and cotton reached records this year and sugar rose to a 30-year high, while corn more than doubled in the past year. Cash silver climbed 0.7 percent to $39.975 an ounce, the highest level since 1980. Palladium for immediate delivery was little changed at $776.25 an ounce, while platinum gained 0.4 percent to $1,791.53 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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