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Gold hits $1,370 amid Mideast tensions

Gold hits $1,370 amid Mideast tensions

Gold prices surged today, driven by safe haven demand spurred by the continuing unrest in the Middle East and UK consumer and retail prices data.

A number of Middle Eastern countries including Yemen and Bahrain got hit by a new wave of riots early this week with the protesters looking to replicate the success of the demonstrations that have rocked Egypt in the past few weeks, leading to the resignation of long-time president Hosni Mubarak.

Gold is normally used by traders for wealth protection during times of political and economic uncertainty.

The Office for National Statistics reported today that consumer price inflation in the UK climbed from 3.7% in December to 4% in January, upping pressure on the Bank of England to hike interest rates and increasing gold’s appeal as an inflation hedge.

Gold last traded at US$1,372/oz.

Silver and platinum rose US$30.81/oz and US$1,834/oz.

Gold producers African Barrick Gold (LON:ABG) and Randgold Resources (LON:RRS) declined marginally, as did platinum Lonmin (LON:LMI).

Silver miner Fresnillo (LON:FRES) retreated 2.8%.

In the FTSE 250, Petropavlovsk (LON:POG) and Aquarius Platinum (LON:AQP) lost 2.2% and 1.5% respectively.

Hochschild Mining (LON:HOC) outperformed the sector, rallying 3%.

Gold developer and producer with assets in West Africa Cluff Gold (LON:CLF) was among the top risers in the sector with a 6% gain.

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January 04 2012

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