Gold hits record high on Libya tensions, weak dollar

2nd March 2011, Comments 0 comments

Gold prices surged to a new record high on Wednesday, driven by safe-haven buying amid violent unrest in Libya, and as the dollar fell against major rival currencies, traders said.

Gold leapt as high as $1,436.80 per ounce on the London Bullion Market at about 1330 GMT. That beat the previous high of $1,434.93 that was struck late on Tuesday.

Silver, meanwhile, soared to $34.88 an ounce, which marked the highest level in 30 years.

"Gold hit a new record high again today as risk aversion took hold in the market ... as Libya looked like descending in to civil war," said analyst Ian O'Sullivan at financial betting group Spread Co.

"The weaker dollar is helping to lift the price of gold, as well as the usual high demand for safe haven buying with the current Middle East situation and inflation concerns.

"Silver also hit a new 30 year high as the demand for silver also continues unabated."

A struggling US unit can make dollar-priced commodities like gold and silver cheaper for buyers holding rival currencies.

The precious metals draw strength in times of geopolitical turmoil because they are regarded by many investors as a safe haven.

© 2011 AFP

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