Gold Rises As Safe Haven Demand Triggered by Iraq

Gold prices are again modestly higher in early trading Thursday and hit a two-week high. Short covering and bargain hunting have been featured the past few sessions, as gold prices have risen around $25 from the lows posted less than two weeks ago. Now, some safe-haven demand is also surfacing due to unrest in Iraq. August Comex gold was last up $4.30 at $1,265.60 an ounce. Spot gold was last quoted up $4.90 at $1,266.00. July Comex silver last traded up $0.098 at $19.265 an ounce.

Iraq is back in the news headlines again, as civil war has broken out in that country amid escalating violence. Iraq’s ruling government is calling on the U.S. for military aid, although such is not likely. Crude oil prices are sharply higher Thursday, mostly on the Iraq news. Gold is also seeing modest safe-haven buying support on the news. The bigger worry is that the violence in Iraq could spread to other Arab countries.

In other overnight news, industrial production in the European Union rose 0.8% in April from March and was up 1.4% year-on-year. The increase was a bit larger than forecast.

U.S. economic data due for release Thursday includes the weekly jobless claims report, import and export prices, and retail sales.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza