Gold and Silver Price Update – Inflation concerns driving price of precious metals upwards

Gold prices are heading towards the biggest weekly gain of the year. Immediate delivery gold was priced at USD $ 1466.80 an ounce, registering a change of 0.51 percent. Concerns about rising inflation, and the situation in Libya and Japan were the factors contributing to gold’s price gains.

Inflation concerns was the major factor contributing to an increased demand for gold, as the European Central Bank raised interest rates for the first time in three years in order to control inflation, with Portugal becoming the third euro-region country needing a bailout. The Chinese Central Bank has also increased interest rates in the country. The stalemate in Libya, and the condition in Japan in the aftermath of the March 11 earthquake also contributed to increasing gold’s safe haven appeal.

The demand for silver has also registered a hike, as inflation concerns have increased investors’ interests in silver. Silver future was trading at USD $ 39.970 an ounce, increasing by 1.06 percent.