Monday, 9th October 2006 (2768 views)

Gold prices increased temporarily on Monday (October 10th) following reports that North Korea has conducted a nuclear test.

Asian trading in gold saw prices increase by around one per cent as demand for the metal as a potential investment opportunity rose.

However, subsequent comments from the Chinese government condemning the nuclear testing and calling for the cessation of future tests helped to ease some of the pressure on prices.

Traders are regarding the price spike as natural because of fears over the stability of world politics, in addition recent plans by OPEC to cut oil production has also generally increased demand for gold as an alternative investment vehicle.

Volumes of trading at the higher prices were relatively light because of the closure of the US market and a Japanese national holiday meant key markets were not open for business.

The price of gold returned to around $576.50 an ounce during afternoon trading, down from a peak of $579.80 earlier in the day.

 

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