Geopolitical Turmoil In Iraq Drives Gold Price Higher

  • Posted Monday, June 16, 2014 at 01:34 PM

Los Angeles CA, June 16 (Tangible Investments) - by James O’Dell - Gold extended its rally on short covering and safe-haven buying on Friday, climbing $3.55 or 0.28 percent to close higher for a second straight week at $1,276.90 an ounce amid rising geopolitical turmoil in Iraq. Silver advanced $0.16 or 0.82 percent to $19.71 an ounce, while the Gold/Silver ratio dropped to 64.78.

"Gold is expected to climb this week as the situation in Iraq remains volatile," says Howie Lee, of Phillip Futures. Violence swept swiftly through Iraq last week as the Al-Qaeda linked Sunni militant group known as the Islamic State of Iraq and al-Sham, or ISIS, captured town after town almost effortlessly as Iraqi military troops, in the face of the oncoming militants, stripped off their uniforms and fled their posts leaving their countrymen to fend for themselves.

Iraq’s senior Shiite Muslim cleric decreed on Friday that every Shiite man was obligated to defend the sect’s religious sites from the rebellious Sunni ISIS insurgents. Iraq also reached out to the U.S. for assistance, so on Sunday, the aircraft carrier USS George H.W. Bush with support craft arrived in the Persian Gulf, many hope it's not too late to slow the ISIS aggression.

President Obama said that his national security team is "looking at all the options," to assist the Iraqis, but the president has made it clear that the U.S. will not commit to defending a government that is unwilling to resolve the nation's sectarian differences. The Sunnis and Shiite religious sects have fought one another for years and engaged recently in a sectarian war from 2006 to 2008 that killed thousands.

The U.S. State Department issued a travel advisory on Sunday, warning that "the ability of the Embassy to respond to situations in which U.S. citizens face difficulty, including arrests, is extremely limited....U.S. citizens in Iraq remain at high risk for kidnapping and terrorist violence."

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