US gold hits 7-week high on Libya tensions, oil rise

NEW YORK: US gold futures rose to their highest in more than seven weeks on Wednesday, closing in on record highs as escalating unrest in Libya and soaring crude oil prices fueled fears of inflation and slower economic growth.

GOLD: COMEX April gold futures settled up $12.90 at $1,414 an ounce on the COMEX division of the NYMEX versus Friday's close.

Ranged from $1,396 to $1,417.30 an ounce -- a seven-week high.

Wall Street fell sharply for a second day as investors sought safety in bonds, gold and the Swiss franc as thousands of Libyans celebrated the liberation of the eastern city of Benghazi from the rule of Muammar Gaddafi, who was reported to have sent a plane to bomb them as he clung to power.

Gold's rally is acutely about the Middle East. The trade is about fear but some people are viewing it as an extension of the inflation trade - James Dailey, portfolio manager of the TEAM Asset Strategy Fund.

US crude oil futures marched rapidly to touch $100 a barrel on possible supply disruption from Libya, stoking inflation concern. They later settled up nearly $3 at about $98 a barrel.

Spot gold rose 0.7 percent to $1,408.80 an ounce by 3:19 p.m. EST (2019 GMT).

SILVER: COMEX March silver ended up 43.6 cents or 1.3 percent at $33.298 an ounce, tracking gold's gains. Ranged from $32.680 to $33.765 -- a 31-year high. Silver rose 1.2 percent to $33.45 an ounce. The metal has risen strongly this month on worries about tightness in the market, but metals consultancy GFMS said on Wednesday there was no need for concern about supply.

PLATINUM: NYMEX April platinum finished down $9.60 at $1,776.70 an ounce as economic worries weighed on industrial metals. Spot platinum dropped 0.5 percent to $1,780.49 an ounce.

PALLADIUM: NYMEX March palladium closed down $31.15 or 3.9 percent at $774.55 an ounce on platinum's decline. Spot palladium lost 3.1 percent at $777.50.