Gold futures surged Monday above $1,400 an ounce, as political unrest in the Mideast and North Africa unnerved investors and prompted them to seek a safe haven in the precious metal.
Gold for April delivery, the most actively traded contract, rallied $14.40 to $1,403 an ounce in electronic trading on Globex.
“Two major factors are likely to be at play here: firstly, investors are increasingly seeking a “safe haven” again amid the growing unrest in the Mideast and their demand for gold is therefore stronger,” said strategists at Commerzbank in a note to clients.
“Secondly, the price is being driven by speculative financial investors, who expanded their net long positions in gold by 9%” in the week ended Feb. 15, they said.
U.S. markets are closed Monday for the Presidents Day holiday, but the prices of precious metals and crude oil rallied in electronic trading.
Gold is typically seen as a safe-haven investment, and gold prices tend to gain at times of political and economic turmoil.
In Libya, fierce clashes between protesters and security forces in several cities have resulted in the deaths of at least 233 people, according to Human Rights Watch, which cited hospital sources in the North African nation. Information about the situation in Libya was very difficult to verify, because of the severe restrictions on foreign media.
Protesters are seeking an end to the decades-long regime of Moammar Gadhafi. Meanwhile, Gadhafi’s son warned in a TV speech that Libya could be engulfed by civil war, according to reports.
In addition to Libya, pro-democracy demonstrations continued in several other nations in the Mideast and North Africa, including Bahrain, Yemen, and Morocco, according to media reports.
Meanwhile, silver futures also soared, with the March contract rising $1.16, or 3.6%, to $33.45 an ounce on Globex.
Elsewhere in the commodity markets, crude futures rallied in electronic trading, as the unrest in Libya spurred concerns over a possible disruption in oil supplies from the nation.