Gold gains to record

FE Team | Published: April 16, 2011 00:00:00 | Updated: February 01, 2018 00:00:00

SINGAPORE, Apr 15 (Bloomberg): Gold gained to a record and silver climbed to the highest level in 31 years as inflation in China accelerated more than forecast, underscoring the challenge that central bankers worldwide face in combating rising prices. Immediate-delivery bullion, which has rallied every year since 2001, gained as much as 0.4 per cent to $1,479.35 an ounce and was at $1,476 at 2:03 p.m. in Singapore. Gold for June delivery in New York climbed to an all-time high of $1,480.50. Consumer prices in the second-largest economy jumped 5.4 per cent in March, marking the fastest growth since 2008. Federal Reserve Bank of Richmond President Jeffrey Lacker said yesterday policy makers were too slow to withdraw stimulus last decade and should tighten credit this time before U.S. inflation picks up too much. European and U.S. inflation data is also due today. "Inflation is the key word to investors," Park Jong Beom, a Seoul-based trader at Tongyang Futures Company, said before the Chinese data, which also showed China's economy grew 9.7 per cent in the first quarter. "Gold will test $1,500 next week." Gold has rallied for a decade on increased investment demand for commodities and concern that currencies may be debased as central banks stimulate their economies. Unrest in the Middle East and Japan's nuclear crisis have also bolstered sales this year as investors seek a store of value. Taming prices is the Chinese government's top priority, the cabinet said this week. Billionaire investor George Soros, chairman of Soros Fund Management LLC, said on April 10 that inflation in China was "somewhat out of control." Economists had expected a March inflation rate of 5.2 per cent, according to the median forecast in a Bloomberg survey. Cash silver climbed as much as 0.6 per cent to $42.4225 an ounce today, the highest level since 1980. The metal is the second-best performer over the past year on the UBS Bloomberg CMCI Index, lagging behind cotton.