Gold Safe Haven Demand Boosted by Iraq

Gold rose to the highest level in almost three weeks in New York as intensifying unrest from Iraq to Ukraine spurred demand for a haven. Silver reached a one-month high.

Bullion has climbed 6.5 percent this year in part because of tension in Ukraine, which said today that natural gas supplies had been cut off by Russia amid worsening relations between the two countries. In Iraq, the army killed at least 279 rebels as fighting gripped OPEC’s second-biggest producer.

“The Iraqi situation is particularly unpleasant and is having a big effect on oil, and gold is seeing fresh buying and short covering on the back of this,” David Govett, the head of precious metals at Marex Spectron Group in London, said in an e-mailed note. “While the uncertainty and unrest remains, one certainly doesn’t want to be short.”

Gold for August delivery increased 0.6 percent to $1,281.20 an ounce at 7:54 a.m. on the Comex in New York. Earlier the precious metal touched $1,285.10, the highest since May 27. Futures trading volume was about 16 percent lower than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.

via Bloomberg

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