Gold Climbs As Middle East Crises Escalate

  • Posted Wednesday, July 09, 2014 at 01:24 PM

Los Angeles CA, July 9 (Tangible Investments) - by James O’Dell - Precious metals prices rose on Tuesday, with Gold gaining $3.95 or 0.30 percent to close at $1,324.10 an ounce as the dollar and equities weakened ahead of the release of the minutes from the June Federal Open Market Committee (FOMC) meeting later today. Investors will be looking for clues to a timeline for the next Fed rate hike. The price of Silver edged up $0.03 or 0.14 percent to close at $21.10 an ounce, while the Gold/Silver ratio increased to 62.75.

“My prediction for the rest of the year is for Gold to go higher, but in a choppy fashion. The last time that we talked, Gold, Silver, and a large number of resource equities had just experienced a quick run-up. At the time, I suggested that the market probably needed to ‘back-and-fill.’ Sure enough, it did," said Rick Rule of Sprott US Holdings Ltd. “Now, the market’s taken another leg up. It probably needs to ‘back-and-fill’ again. This pattern will likely continue in the next 12 months."

Meanwhile, persistent geopolitical crises in the Middle East and Ukraine, continue to underpin the yellow metal. On Wednesday, the Israeli army intensified its air strikes on the Gaza Strip, hammering Hamas for a second day with an intense military bombardment. Israel has also massed thousands of its military forces on the border of the Gaza Strip in preparation for a possible incursion into the Palestinian enclave.

In Iraq, officials have confirmed that ISIS rebels are in control of an unused chemical weapons factory in Muthanna, where some 2,500 rockets filled with sarin and mustard gas are thought to be stored. In Ukraine, government forces are on the offensive and are set to retake the eastern cities of Donetsk and Luhansk, the center of the pro-Russian insurgency, while Russian Foreign Minister Sergei Lavrov calls for a cease-fire. "We need to throw aside everything to immediately stop the use of force," said Lavrov.

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