By Claudia Assis and Polya Lesova, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures on Friday advanced further as Libya’s government said it would agree to a cease-fire after the United Nations approved a no-fly zone over the country and tensions in the Middle East and North Africa continued.
Gold for April delivery gained $14.30, or 1%, to $1,418.50 an ounce on the Comex division of the New York Mercantile Exchange.
Investors seeking the perceived safety of gold drove it to an intraday high of $1,424.10 an ounce on reports that Col. Moammar Gadhafi’s government had agreed to a cease-fire.
Meanwhile, dozens of protesters were killed in Yemen after police opened fire on demonstrators in the capital city of Sana, according to news reports.
Gold futures gained 0.6% Thursday in regular New York trade.
The latest gains for gold came as the United Nations Security Council on Thursday imposed a ban on all flights in Libya’s airspace and authorized “all necessary measures” to protect civilians under threat of attack in the country, including in the rebel-controlled city of Benghazi.
The resolution paves the way for air attacks against the Gadhafi regime within days.
Traders were also following developments in Japan, where workers are trying to restore power to damaged reactors at the Fukushima Daiichi nuclear-power plant. Read more about Japan.
Meanwhile, the U.S. dollar soared against the Japanese yen after the Group of Seven nations agreed to intervene jointly in foreign-exchange markets to curb the yen’s rise. The greenback rose 2.6% to ¥81.26.
The dollar index (DXY 75.86, -0.19, -0.25%) , which compares the U.S. unit to a basket of six currencies, declined 0.3% to 75.80, providing an extra help for gold’s rise. A weaker dollar is beneficial for the metal and other dollar-denominated commodities as it makes them cheaper for holders of other currencies.
Other metals tracked gold higher, with silver recouping yesterday’s losses to gain 2.2%. The May silver (SIK11 3,508, +82.20, +2.40%) contract added 72 cents to $34.97 an ounce.
Copper rose modestly, with the May contract (HGK11 434.00, -0.40, -0.09%) adding a penny, or 0.2%, to $4.35 a pound.
