NEW YORK/LONDON (Reuters) - Gold prices rose on Monday, as a nuclear crisis in Japan and heightened political unrest across the Arab world triggered safe-haven buying.
Platinum group metals fell more than 1 percent as demand
expectations took a hit after Japan’s devastating earthquake and tsunami, which forced plant closures and production outages in the country’s powerful auto industry.
“Gold in the interim remains well bid due to all the uncertainty in the world, led by Japan’s possible nuclear meltdown. The Middle East crisis still looms though it is no longer the lead story on the headlines,” said Miguel Perez-Santalla, vice president of Heraeus Precious Metals Management.
Gold benefited from heightened uncertainty as Japan scrambled to avert a meltdown at a stricken nuclear plant on Monday after a hydrogen explosion at one reactor and exposure of fuel rods at another.
Political tensions flared across Middle East in North Africa after Saudi Arabia sent troops into Bahrain on Monday to help put down weeks of protests by the Shi’ite Muslim majority, and as fighting intensified between Muammar Gaddafi and Libyan rebels. Growing unrest was also reported in Yemen.
Gold hit a high $1,431.89 an ounce, within sight of the record $1,444.40 it hit last week. It gained 0.6 percent to $1,425.86 an ounce by 12:31 p.m. EDT.
U.S. gold futures for April delivery rose 0.3 percent to $1,426.60.
World stocks fell to six-week lows on Monday on fears over the global economic impact from Japan’s disaster, and that helped lift gold.
Japanese stocks posted their biggest daily decline since October 2008 in record volume as investors speculated on economic losses. Potential fluctuations in the FX market also prompted investors to seek a shelter in gold.
Silver largely tracked gold to rise 0.1 percent to $35.87 an ounce.
Platinum slid 1.4 percent to $1,753.99 an ounce, and palladium lost 1.6 percent to $744.72.
Reporting by Frank Tang and Jan Harvey;editing by Sofina Mirza-Reid