gold rises to 25-year high as oil gains spur infla Gold Rises to 25-Year High as Oil Gains Spur Inflation Concerns
April 18 (Bloomberg) -- Gold rose in London, extending a rally to a 25-year high, as investors bought bullion on concern higher global energy costs may spur inflation.
Crude oil in London rose to a record $71.83 a barrel on concern tension between the U.S. and Iran over the Middle East nation's nuclear program will lead to an energy shortage. Some investors buy gold to hedge against inflation, which erodes the value of fixed-income assets such as bonds.
Gold for immediate delivery rose as much as $5.42, or 0.9 percent, to $618.90 an ounce, the highest since Dec. 5, 1980. It traded at $616.51 at 10:05 a.m. in London.
``Rising crude oil prices and concerns over Iran'' are driving gold higher, John Meyer, an analyst at Numis Securities Ltd. in London said in an interview today. Bullion may reach $650 by June, Meyer added.
Gold futures jumped to $873 an ounce in 1980, when U.S. consumer prices rose 12.5 percent from the previous year.
Iran has expanded its underground nuclear sites in the cities of Isfahan and Natanz, the Institute for Science and International Security said. The UN Security Council demanded the suspension of Iran's program by the end of this month. Iran, the world's fourth- largest oil producer, has refused.
Among other precious metals, silver was little changed at $13.565 ounce, after earlier reaching $13.72, the highest since 1983.
Silver has jumped 53 percent this year in anticipation of U.S. government approval for Barclays Plc's exchange-traded fund linked to the metal. The fund makes it easier to own silver and is modeled on StreeTracks Gold, which has attracted $6.7 billion in investment since its debut in November 2004.
Platinum was little changed at $1,100.50 an ounce while palladium traded at $358.
http://www.bloomberg.com/apps/news?pid=10000082&sid=aK0oRbFNz.iE&refer=canada#
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