Gold Ready for War against Iran
Gold prices at world markets came close to $700 per ounce yesterday. Gold cost $684 per ounce at London’s spot market, while April futures at NYMEX reached up to $689.8 per ounce. It is not the record yet: the peak was reached in January 1980, when, according to Bloomberg, gold futures were up to $873 per ounce. However, according to the World Gold Council’s data, the monthly average prices are very close to record levels reached due to events in Iran over 25 years ago (see chart).
Gold is traditionally seen as ‘safe harbor’ for investment. The growth of gold prices quite often correlates with the upsurge of oil prices, because Western investors fear the inflation that follows it. Eastern investors apprehend instability; gold is much more transportable. Peaks of oil and gold prices traditionally coincide with the peak in expecting a large-scale Middle East conflict.
The current up-going trend for gold prices began after September 11, 2001. Gold was hardly affected by US war in Afghanistan and Iraq. However, investors consider Iran to be the chief risk at which they should go into gold and nowhere else.
If we believe the yesterday’s gold price in London, the financial world is definitely expecting perturbations in Iran, as strong as Islamic revolution. Certainly, this time it is about US bombers, and not religion.
www.kommersant.com
All the Article in Russian as of Feb. 27, 2007
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