March 14, 2011, 2:59 p.m. EDT
By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures settled modestly up on Monday, buoyed by fresh doubts about the global recovery in light of destruction in Japan and ongoing concerns about euro-zone sovereign debt and unrest in the Middle East and North Africa.
Gold for April delivery (GCJ11 1,426, +4.60, +0.32%) added $3.10, or 0.2%, to settle at $1,424.90 an ounce on the Comex division of the New York Mercantile Exchange.
“The bottom line is, people look at gold as money” anytime unrest or natural disasters hit, said Michael K. Smith, president of T & K Futures and Options Inc. in Florida.
Given the European sovereign debt crisis, geopolitical instability in oil producing nations, and continuing concerns about the global economy, Japan’s quake “could not have come at a worse time both for the indebted Japanese economy and the global economy,” added analysts at GoldCore in a note to clients Monday.
The Japanese started their search-and-rescue operations over the weekend only to find out there was nothing much left to rescue after Friday’s quake.
Fears that the nuclear reactors, damaged by the quake, are at risk of a meltdown added to the country’s woes. Read about Japanese shares.
Japan’s earthquake may have pushed out Libya from the headlines, but fighting in the North African country continued with forces loyal to the government on the offensive around Tripoli.
In Bahrain, troops from Saudi Arabia and other Persian Gulf states moved to suppress antigovernment protests, the Wall Street Journal reported. The soldiers were sent to protect the tiny island country’s oil and power facilities.
In Europe, euro zone leaders reached an agreement Saturday to boost their lending capacity to a full 500 billion euros ($694.9 billion) from slightly more than €300 billion.
They also agreed to ensure that the permanent bailout mechanism to be put in place in 2013 will also offer half a trillion euros in capacity.
Bailout funds could be used to buy bonds from governments directly, but they rejected calls to purchase bonds on the secondary market from investors. Read more about euro pact
“Even so, there are still points of disagreement among state and government heads and the debt crisis is by no means over. This issue is set to accompany markets for quite a while yet and support gold prices accordingly,” analysts at Commerzbank said in a note to clients Monday.
Meanwhile, silver wavered between small gains and losses but other metals more closely linked to industrial activities traded lower.
Silver for May delivery (SIK11 3,590, -4.00, -0.11%) declined 9 cents, or 0.3%, to $35.84 an ounce. May copper (HGK11 420.00, -0.75, -0.18%) wavered between small gains and losses but ultimately declined 2 cents, or 0.5%, to settle at $4.19 a pound.
“The disruption to industrial sector activity is likely to have a negative impact on the industrial metals and bulk commodity sectors,” analysts at Deutsche Bank said in a note to clients. Copper and zinc, however,
would be the principal beneficiaries of a large scale reconstruction program,” they added.
Platinum and palladium also declined, with palladium leading losses among metals traded on Comex. Palladium for June delivery (PAM11 744.50, -21.00, -2.74%) retreated $17.30, or 2.3%, to $748.20 an ounce.
Platinum for April delivery (PLJ11 1,751, -30.70, -1.72%) was off $29.40, or 1.7%, to $1,752.30 an ounce.
Claudia Assis is a San Francisco-based reporter for MarketWatch