Gold Prices Roar Back Over Unrest in Arab World

Seekers of financial safe havens amid the unrest in North Africa and the Middle East have once again taken refuge in gold, driving the price per ounce over $1,400 for the first time in almost seven weeks.

Reuters reported that Monday saw gold prices hit levels they have not seen since Jan. 19 (for euro-priced gold) and Jan. 14 (for sterling-priced gold) as turmoil spreads across the Middle East/North Africa (MENA) region. Daniel Major, an analyst at RBS Global Banking & Markets, said in the report, “There is no doubt that the recent move higher across the precious metals reflects a degree of safe-haven buying as a result of the unrest in the Middle East.”

He went on to say, “If [buying] is not through the exchange-traded funds [ETFs]or a clear change in the net long on Comex, it is most likely to be through the physical market—coin and small bar buying, and I potentially wouldn't rule out larger purchases by high-net-worth individuals on the back of the unrest we're seeing,” and added, “That has clearly been a game-changer in the last couple of weeks for gold and silver after what was quite a lethargic start to the year in terms of identifiable investment demand in the exchange-traded funds.”