Gold hits new record

March 02, 2011 | 07:30

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Gold struck a new record high at $1,434.50 an ounce Tuesday as worries spread that the surging price of oil could fuel inflation and dampen economic growth.

The price on the London Bullion Market jumped more than $14 an ounce from Monday to top last December's record of $1,431.25, before falling off to below $1,434 after 2200 GMT.

On the New York Comex exchange, the price topped out at $1,434.40, a record for that market, before pulling back slightly.

The jump came after oil prices rose again on Libyan unrest and US Federal Reserve chief Ben Bernanke warned that a sustained rise in oil prices could potentially threaten US economic growth and spark dangerous broader price rises.

"Sustained rises in the prices of oil and other commodities would represent a threat both to economic growth and to overall price stability," the US central bank chief said in testimony to Congress Tuesday.

"As we're coming into the first day of the month, we see (asset) reallocation into gold and silver markets," said Rich Ilczyszyn of Lind-Waldock.

"Ultimately this is part of the contagion issue in the Middle East."

AFP

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