Tuesday, 18th April 2006 (3769 views)

Fears over a conflict between Iran and Western capitalist nations have fuelled concerns over inflation, meaning more investors are hedging in gold to counteract this potential trend.

Oil has reached new highs on the New York stock exchange of almost $71 a barrel and analysts fear prices could continue to rise, pending further diplomatic tensions with the volatile Middle Eastern state.

Traditionally a hedge against inflationary prices, gold bullion has recently been touching record high prices and the strong run continues to gather momentum.

Darren Heathcote, head of trading at N.M Rothschild & Sons in Australia told Bloomberg: "People have been buying gold for speculation, safe haven and inflationary hedge.

"Funds have been buying it up. We remain bullish. The immediate target today may be $620," he added.

The precious metal's price was over $600 on the Australian market for the first time in a quarter of a century recently and now it has reached nearly $620 on the New York and Australian exchanges as investors look to gold to protect them against oil prices causing stock volatility.

Oil price instability also traditionally prompts a reduction in investments in currencies so the weakening US dollar will likely be further affected by gold and oil prices rising, market analysts confirmed.

 

« Back to the stories

 

The news feeds on this site are independently provided by Adfero Limited © and do not represent the views or opinions of the World Gold Council.