Gold up as Libya’s cease-fire fails to calm waters

Gold rose for a third straight day on Friday after a unilateral cease-fire declared by Libyan leader Muammar Gaddafi failed to calm investor nerves as political tensions heightened across the Arab world.
Bullion also benefited from a weaker dollar as traders braced for more official action after the G7 nations coordinated to intervene into the yen, and as fresh political unrest was reported in Yemen, Syria, Bahrain and Saudi Arabia.
"It's the concern about what would happen in Libya. Will Gaddafi really stick up to the cease-fire? That's probably the only reason why gold's being bid up at all," said Dennis Gartman, author of the Gartman Letter, a daily investment newsletter.
Gartman, however, said that recent weaker volume suggested gold could lack the conviction to rise further, and the metal's gains on Friday were largely driven by a dollar drop.
Gold rose 1% to $1,418.70 an ounce by 1635 GMT.
Earlier in the session, the metal was little changed after China's central bank raised lenders' required reserves by 50 basis points, a move viewed by some as a confirmation of gold's inflation-hedge appeal.
Sentiment also improved after U.S. investment bank Goldman Sachs Group Inc said it forecast gold prices rallying to a record $1,480 an ounce in three months on declining U.S. real interest rates.
Spot silver rose 2.6% to $35.07 an ounce, while platinum gained 1.1% to 1,715.99 an ounce and palladium climbed 3% to $725.97 an ounce.