Home > GOLD, Precious Metals, Silver > Gold Climbs, Silver Touches 30-Year High Amid Inflation Concern

Gold Climbs, Silver Touches 30-Year High Amid Inflation Concern

February 18, 2011

bloomberg.com

Gold rose to a one-month high as rising consumer prices boosted investor demand for an inflation hedge. Silver touched a 30-year high.

The cost of living in the U.S. climbed in January for a seventh month, the government said today. The U.K. consumer- price index rose to a 26-month high last month, a report this week showed. The precious metal has fallen 2.6 percent this year after rallying 30 percent in 2010 and touching a record in December.

“Gold is ready to resume its uptrend because of the worsening outlook for inflation,” said James Turk, founder of GoldMoney.com, which held $1.4 billion of precious metals and currencies for investors at the end of January.

Gold futures for April delivery climbed $10, or 0.7 percent, to $1,375.10 an ounce at 1:42 p.m. on the Comex in New York. Earlier, the price touched $1,385.40, the highest since Jan. 13. The metal reached a record $1,432.50 on Dec. 7.

China, India, Indonesia, Thailand and South Korea have boosted interest rates as policy makers sought to cool the economies leading a global rebound. Singapore raised its inflation forecast to 4 percent for this year after growth expanded at a record pace last year.

Jewelry Demand

Indian and Chinese jewelry demand climbed to a record last year, the World Gold Council said in a report today. Usage in India advanced 47 percent in the fourth quarter to 210.5 metric tons, and consumption in China rose 26 percent to 115.8 tons, the group said.

“Silver is playing catch-up to gold and will pull gold higher,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “The market has turned its attention to geopolitical fear, food inflation and the Fed not changing its stance.”

Silver futures for March delivery rose 94.1 cents, or 3.1 percent, to $31.57 an ounce on the Comex. The metal touched $31.69 during after-hours trading, the highest since March 1980. The price has almost doubled in the past year.

Platinum futures for April delivery added $9.70, or 0.5 percent, to $1,844 an ounce, and palladium for March delivery rose $4.65, or 0.6 percent, to $843 an ounce on the New York Mercantile Exchange.

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