Gold rose above $1,430 an ounce on Friday, while silver surged 3 percent to 31-year highs, as soaring oil prices fuelled by widening unrest in Libya prompted investors to pile into safe havens. Bullion hit a record high of $1,440.10 an ounce on Wednesday and is on track to post its fifth consecutive weekly gain on fears that Libya's escalating violence could spread across the Arab world.
World stocks and the dollar declined as upbeat US jobs data was offset by mounting economic uncertainty. "It's really all about oil, and I suspect that's going to be the pattern next week as well. Gold's uncertainty hedge and ultimate currency roles continue to be very much in place," said Bill O'Neill, partner of LOGIC Advisors.
US crude prices jumped to their highest levels since September 2008 and Brent rose above $116 a barrel as Libyan security forces cracked down on protesters in Tripoli and clashed with rebels near the major oil terminal of Ras Lanuf. The Reuters/Jefferies CRB commodities index, which is heavily weighted in oil, was set to notch its best gains in 13 weeks.
Spot gold hit a high of $1,431.85 an ounce and was up 1.1 percent at $1,430.70 by 12:13 pm EST (1713 GMT). Gold fixed at $1,427 in London. US gold futures for April delivery rose $15.80 to $1,432.20. Gains in gold also lifted silver prices, which climbed to their highest since early 1980 at $35.32 an ounce.
Spot silver gained 3.3 percent to $35.13 an ounce. The gold-silver ratio, which shows how many ounces of silver it takes to buy one ounce of gold, fell to a 13-year low. Silver has risen amid a tight physical market and very strong demand for industrial metals as the economy recovers. "Ultimately, the reasons why silver is going up are related to gold," O'Neill said. "Make no mistake, if gold reverses direction and starts to go to a bear market, silver will follow with a vengeance."
Gold gains accelerated after news that US nonfarm payrolls increased by 192,000 in February, above market expectations for 185,000 jobs. Holdings in the world's largest silver ETF, the iShares Silver Trust, rose to 10,794.89 tonnes by March 3, their highest since early January. Among other precious metals, platinum gained 0.5 percent to $1,832.24 an ounce and palladium eased 0.7 percent to $805.97.