TANGIBLE INVESTMENTS - Los Angeles - by James O'Dell - Precious metals prices are sharply higher across the board on Wednesday with Gold climbing $20.25 or 1.57 percent, at the time of this writing, to trade at $1,309.00 an ounce, while Silver jumped $0.29 or 1.46 percent to trade at $20.07 an ounce, mostly on bargain hunting and short covering. “Buying below $1,300 Gold proved attractive once again as most funds are under-invested in the second half of the year…,” said George Gero of RBC Capital Markets.
Investors are also being drawn to Gold as a safe-haven after NATO accused Russia of once again massing troops on Ukraine’s eastern border. “It has a lot to do with the (Russian) troop buildup along the Ukrainian border,” said Daniel Pavilonis, of RJO Futures. "It's a safe-haven, flight-to-quality day for Gold because of fears in the market caused by lower European stock prices and Putin's aggressive attitude," said Bill O'Neill of LOGIC Advisors.
Chartists, however, characterize the sharp gain as a technical-chart breakout from a “bull pennant” formation that triggered buy stops when the Gold price broke above its 100-day moving average.
Of course, it may also be the historic $20 billion oil deal that Russia just signed with Iran, a deal designed to bypass the escalating sanctions recently imposed on Russia by the West. The petro-dollar based monetary system may also take a hit after Russian Energy Minister Alexander Novak and Iranian Energy Minister, Bijan Zanganeh, signed a five year deal in Moscow focused heavily on the oil sector.
"Based on Iran's proposal, we will participate in arranging shipments of crude oil, including to the Russian market," said Novak. The five year accord permits Russia to buy 500,000 barrels of Iranian oil per day, as well as “cooperate in the oil-gas industry, construction of power plants, grids, supply of machinery, consumer goods and agriculture products”, according to Russia's Energy Ministry.
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