Gold and oil soar on Gulf war fearsgreenspun.com : LUSENET : Current News - Homefront Preparations : One Thread
Thursday, 19 December, 2002, 17:28 GMT
Growing worries about a war with Iraq have triggered big rises in the price of oil and gold.
The threat of military action, together with the continuing strike-driven shutdown of Venezuela's crude oil production, has driven oil prices to a three-month high.
Oil prices also strengthened after chief United Nations weapons inspector Hans Blix said there was "little new information" in Iraq's weapons declaration to the UN.
Gold, meanwhile, has assumed its traditional role as a safe haven in uncertain times, with its price hitting levels not seen in almost six years.
Wednesday's hints from the Bush administration that it considers Iraq to be in violation of Resolution 1441 come as the US troop build-up in friendly Gulf states accelerates.
A week after oil cartel Opec agreed production cuts, and with the Venezuela strike showing no signs of abating, the price of Brent crude for February delivery rose as much as a dollar to an 11-week high of $29 a barrel late on Wednesday.
Although the gains abated slightly at the close, by Thursday afternoon the price was back up to $29.05.
"We view a war with Iraq as virtually inevitable, but stress that nothing is likely to happen until the end of January at the earliest," said oil analyst Lawrence Eagles at brokers GNI.
New York's price for light sweet crude to be delivered in January, meanwhile, gained 56 cents a barrel on Thursday to $31.
Gold markets were booming too, as the combination of falling stock markets, the weakening dollar and political uncertainty came together to focus investors on more old-fashioned stores of value.
"Gold is on fire," said Andy Maag, metals analyst at UBS Warburg.
"It's all about fears and liquidity... there is enormous appetite out there as alternative investment opportunities are waning."
The bullion price "fix" on the London Metal Exchange for Thursday afternoon was $345 a troy ounce, up from $338 the day before.
In Asia earlier in the day, the spot price for gold had leapt to as much as $353.75 an ounce before falling back.
-- Anonymous, December 19, 2002