* Gold hits record high for second day
* Arab League gathers in Cairo to discuss Libya violence
* Silver hits fresh 31-year high; big ETF reports inflow
* Coming up: U.S. initial jobless claims data Thursday
(Recasts, adds comments, updates prices, adds second
byline/dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, March 2 (Reuters) - Gold rose to a record
high for a second straight day on Wednesday, breaching $1,440
an ounce as political unrest in Libya and surging oil prices
prompted investors to pile in.
Unrest across the Middle East and North Africa, which
unseated leaders in Tunisia and Egypt before spreading to
Libya, Bahrain, Yemen, Oman and Iran, fueled safe-haven buying
on fears that tensions could flare across the entire region.
"You have political problems all over the world, a Federal
Reserve bank that still erred on the side of easing rather than
tightening, rising commodities prices in general, and growing
disdain for fiat currencies generally," said Dennis Gartman,
author of the Gartman Letter, an daily investment newsletter.
"It will be illogical for gold not to be going higher," he
said.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For graphics on the unrest in the Middle East and North
Africa: http://r.reuters.com/nym77r
For graphic showing the oil price impact on GDP:
http://r.reuters.com/jux28r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Two U.S. warships were passing through the Suez Canal on
Wednesday, heading for the waters off Libya to pressure that
country's ruler, Muammar Gaddafi, to step down. Gaddafi
launched a land and air offensive to retake territory from
rebels in Libya's eastern region. []
At a meeting of Arab foreign ministers in Cairo on
Wednesday, Iraqi Foreign Minister Hoshiyar Zebari said the
Libya crisis is an internal Arab affair and foreign powers
should refrain from any intervention.
RECORD TERRITORY
Spot gold <XAU=> rose 0.4 percent to $1,439.19 an ounce by
12:00 p.m. EST (1700 GMT), after peaking at an all-time high of
$1,440.10. The metal fixed at $1,435.50 an ounce in London.
U.S. gold futures for April delivery <GCJ1> rose $7.90 to
$1,439.10.
Gold is building on a 6 percent rise in February, its
biggest one-month climb since August.
World stocks declined as unrest in the Middle East and
North Africa drove up oil prices and pushed investors into
safer assets.
Rising oil prices will support gold's status as an
inflation hedge, analysts said, if they appear to curb global
growth. "They could very well impact (growth in) Europe, the
United States as well, and indeed China," said VM Group analyst
Carl Firman.
"That will give rise to uncertainty, it will lower demand
predictions for, for instance, copper, and where it knocks
industrial metals and equities, gold will probably benefit," he
said.
U.S. crude futures rose above $101 a barrel as escalating
violence in Libya threatened the OPEC nation's oil
infrastructure and markets braced for a potentially prolonged
disruption. []
Federal Reserve Chairman Ben Bernanke said on Tuesday the
surge in oil prices is unlikely to hurt the U.S. economy,
boosting gold as he offered no hint that the U.S. central bank
was considering winding down its loose monetary policy.
RISK APPETITE WANES
Violence in the region cooled appetite for higher-risk
assets such as stocks and boosted so-called safe havens like
German government bonds, the Swiss franc and gold. []
[] []
Silver <XAG=> rose to a peak of $34.96 an ounce, its
strongest level since early 1980. It later rose 0.4 percent to
$34.79 an ounce.
Holdings in the world's largest silver exchange-traded
fund, the iShares Silver Trust <SLV>, rose to 10,693.68 tonnes
on March 1, their highest since Jan. 14. []
The trust reported a slight recovery in its holdings last
month after they posted their biggest ever one-month fall in
January. []
Platinum <XPT=> gained 0.9 percent to $1,855.49 an ounce
and palladium <XPD=> climbed 0.4 percent to $817.47.
Prices at 12:13 p.m. EST (1713 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCJ1> 1437.50 6.30 0.4% 1.1%
US silver <SIK1> 34.830 0.403 1.2% 12.6%
US platinum <PLJ1> 1859.90 14.80 0.8% 4.6%
US palladium <PAM1> 821.00 4.30 0.5% 2.2%
Gold <XAU=> 1436.50 2.80 0.2% 1.2%
Silver <XAG=> 34.81 0.15 0.5% 12.9%
Platinum <XPT=> 1855.99 17.50 1.0% 5.0%
Palladium <XPD=> 816.97 2.50 0.3% 2.2%
Gold Fix <XAUFIX=> 1435.50 5.00 0.3% 1.8%
Silver Fix <XAGFIX=> 34.75 38.00 1.1% 13.5%
Platinum Fix <XPTFIX=> 1846.00 9.00 0.5% 6.6%
Palladium Fix <XPDFIX=> 821.00 7.00 0.9% 3.8%
(Reporting by Frank Tang and Jan Harvey; editing by Jim
Marshall)
