Gold gains safe-haven bid from M.East turmoil
Gold rose for a fourth day in a row on Thursday in its strongest run since September, helped by safe-haven demand as unrest spread across the Middle East, while the dollar remained under mild pressure.
Investors are closely watching the growing turmoil in the Middle East and North Africa, especially after police in Bahrain attacked demonstrators camped out in the capital, killing three, and riots broke out in Libya.
Gold was set for its strongest weekly performance since the start of the year as tensions flared, boosting other perceived safe-haven assets like the Swiss franc, which rose 0.3 percent on the day and U.S. Treasuries.
Spot gold rose 0.4 percent to $1,379.00 an ounce by 1255 GMT, after hitting a one-month high of $1,381.84 in the previous session.
U.S. gold futures also rose 0.2 percent to $1,378.10.
Also in focus was U.S. inflation data for January, due later in the day, which is expected to show consumer prices picked up at a faster pace last month than they did at the same time last year.
The market is very jittery because you have civil unrest across the entire Middle East, said VTB Capital analyst Andrey Kryuchenkov.
The momentum is bullish, the uptrend is intact and there probably is some inflation buying ... but today the key is the inflation data, he said.
The government will release its January CPI report at 1330 GMT after its core rate on producer prices saw their biggest monthly rise since October 2008.
The U.S. government also auctions $9 billion in new 30-year inflation-linked bonds, which could offer some gauge of investor expectations for inflation.
The dollar index .DXY was largely unchanged on the day, as the Swiss franc gained from safe-haven flows, yet the euro came under pressure from ongoing concern over the region's finances and debt burden.
The minutes of the Federal Reserve's most recent policy meeting showed the central bank is more confident in the economic outlook but still unhappy with the recovery in the job market.
Physical demand from Asia has been muted this week and may drag on gold as the spot price continues to climb.
Yet the longer-term outlook remains bullish, according to the World Gold Council's Gold Demand Trends report, released on Thursday, which expected Indian and Chinese consumption to remain robust.
Premiums for gold bars in Hong Kong fell below $2, from more than $3 an ounce over London prices, after supply tightness before the Lunar New Year holiday had eased, dealers said.
In other precious metals, silver rose 0.3 percent to $30.73 an ounce, while the platinum group metals came under mild pressure, echoing declines in other industrial metals.
Spot palladium reversed earlier gains to fall 0.2 percent to $835.97 an ounce, while platinum eased 0.1 percent to $1,825.60.
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