Monday, 17th July 2006 (5306 views)

Gold prices have soared to their highest levels in two months as demand from stockpilers rose due to rising tensions in the Middle East.

Well over 100 people have been killed in violence between Israel and Hizbollah insurrectionists and the prospect of wider conflict in the region has prompted a welter of gold buying both for future sales and as a guard against inflation.

The result of this was that the price of an ounce of gold rose as high as $637.80 an ounce first thing in the morning of Monday 17th, the highest it has been since May when it reached $730.

Darren Heathcote, head of trading at Investec Australia, told Reuters: "It looks like gold is certainly going to test higher at some point, unless it calms down which looks very unlikely.

"We don't seem to have any rationality when it comes to dealing with the Middle East."

Analyst at website TheBullionDesk James Moore concurred with Mr Heathcote, predicting that the possibility of further upheaval in the region makes it distinctly possible that gold prices could break the $700 barrier later this week.

 

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