<h3>Gold advances on Middle East tensions and inflationary pressures</h3>
By IBT Staff Reporter On
Gold advances on Middle East tensions and inflationary pressures
Gold surged for the fourth straight session, heading for the third weekly advance, as upheavals in the Middle East and inflationary pressures enhanced demand on the precious metal as safe-haven asset and inflation hedge.The geopolitical tensions in the MENA region that may end up with a major change in these countries lured some investors to buy gold. After the change in Tunisia and Egypt the contagion spread to Yemen, Bahrain, Iran and Libya.On the other hand, gold is getting support form the rise in inflation in global economies. This week, data showed rise in Chinese and UK inflation, where US CPI due later in the day is predicted to rise 1.6% annually in January from 1.5%.Yesterday, the Fed raised inflation forecasts to range between 3.4% and 3.9% from 3.0% and 3.6% estimated in November. By the same token, BoE inflation report mentioned that inflation will hover between 4% and 5% in the coming few months.The aforesaid factors helped gold prices to offset the decline in physical demand, especially in Asia ahead of the Lunar New Year, which was affected by the rise in prices that were deemed by many investors as overestimated.Technically speaking, the breach of $1375.00 level pushed gold up to a high of $1379.81, where it may find resistance at $1400.00 levels.Among other precious metals, platinum inched up to $1831.50 from the day's opening of $1829.70, palladium soared to $842.00 from $840.20 and silver hovered near the day's opening at 30.70, as of 08:15 GMT.Moreover, the improvement in data and earnings encouraged some investors to buy risky assets, helping shares to advance and thereby drafting some attension from gold.In the FOREX market, the dollar declined for the second day against a basket of major currencies to 78.14 from the day's opening level of 78.22, as depicted by the dollar index.The dollar retreated following the Fed's comments yesterday which referred to the continuation of the $600 billion program despite the improvement in economic data and highlighted that the job market is still weak notwithstanding the decline in unemployment to 9.4% in January from 9.0% in December.Later in the day, US initial jobless claims will show rise to 400 thousands last week from 383 thousands the week before, according to medianprojections.