Gold Hits New High

Reuters

Gold hit a fresh record high on Wednesday while world stocks declined as unrest in the Middle East and North Africa drove up oil prices and pushed investors into safer assets.

The MSCI world equity index slipped 0.2% and was off about 2% from a 30-month peak set in February. The index is still up about 3% since the start of the year.

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U.S. stocks were slightly higher as upbeat labor market data offset further gains in oil prices.Also, in a flight to safety the dollar fell to a record low against the Swiss franc, while U.S. Treasury prices were lower.

Investors were nervous that political instability could spread to major oil producer Saudi Arabia, a central U.S. ally in the region.

"If it continues to spread, Middle East tensions may reach a point where a war could start and that could ignite an incredible rally (in oil prices)," said Ryoma Furumi, a commodities sales manager at Newedge Japan.

Forces loyal to Muammar Gaddafi launched a major offensive against rebels in eastern Libya, sparking a rebel warning that foreign military help might be needed to "put the nail in his coffin" and end Gaddafi's long rule.

Saudi Arabia's stock markets declined for a 13th session and hit a 22-month low, while Dubai equities fell to a 6-1/2 year low, reflecting investor worries over planned protests in Saudi Arabia."We are seeing a significant elevation in risk premiums, with investors revising their expectations for the region," said Hashem Montasser, managing partner at Frontlane Capital, a Dubai-based asset management firm.

"The earnings outlook is very unclear."

Saudi Arabia's benchmark stock index .TASI fell nearly 4% at one point to a fresh 22-month low.

At the same time, gold hit a record high above $1,436 an ounce, building on a 6% rise in February, its biggest one-month climb since August.

Brent crude for April delivery rose 0.4% to $115.83 a barrel on Wednesday. The contract settled up $3.62, or 3.24%, at $115.42 a barrel on Tuesday, its highest close since August 2008.U.S. crude for April delivery rose 1 percent to $100.66 early Wednesday.

In the U.S. stock market, the Dow Jones industrial average .DJI rose 26.83 points, or 0.22%, at 12,084.85. The Standard & Poor's 500 Index .SPX was up 3.23 points, or 0.25%, at 1,309.56. The Nasdaq Composite Index .IXIC added 11.63 points, or 0.42% at 2,749.04.

In Europe, the FTSEurofirst 300 index .FTEU3 fell 0.6%.

The benchmark 10-year U.S. Treasury note was down 8/32, its yield at 3.43%, up from 3.40% on Tuesday, while the Swiss franc soared to a record high versus the dollar.