Gold Gains As US Considers Air Strikes On Islamic State Fighters

  • Posted Thursday, August 07, 2014 at 08:56 PM

TANGIBLE INVESTMENTS - Los Angeles - by James O'Dell - The Gold price extended gains on Thursday, adding $6.10 or 0.47 percent to trade at $1,311.80 an ounce, after breaching key resistance, while Silver dipped $0.08 or 0.40 percent to trade at $19.94 an ounce. In the euro zone, European Central Bank (ECB) President Mario Draghi announced on Thursday that the euro zone economy can get back on track with its current level of monetary accommodation.

He did, however, reiterate the governing council’s willingness to do more if needed, while repeating an earlier promise to keep interest rates at record lows for an extended period. “Our monetary policy stance remains and will remain accommodative,” he continued.

“I can only reaffirm that the governing council is unanimous in its commitment towards the use of unconventional measures like ABS purchases, like QE, if our medium-term outlook for inflation were to change.” President Draghi added that inflation “is expected to remain at low levels over the coming months, before increasing gradually during 2015 and 2016.”

In response to a question, Draghi acknowledged that a risk exists to the euro region economy should the Ukraine/Russia crisis escalate, while in the eastern Ukraine cities of Luhansk and Donetsk that is precisely what is occurring as the Ukrainian military appears poised to besiege the cities.

It appears that the Ukrainian military has finally been able to turn the tide of the battle in the east, but the fear is now that Russia may use the rising death toll as a pretext for an incursion. With 20,000 combat-ready troops now massed on Ukraine's border, the chance of a Russian incursion into sovereign territory has certainly ratcheted higher.

Meanwhile, in a breaking report from the Middle East, the U.S. is considering air strikes against the Islamic State, formerly known as ISIS, in an area of Northern Iraq, where the insurgents have trapped around 40,000 fleeing Iraqi refugees. The U.S. wants to air-drop food and water to the refugees but will be forced to provide air support for the operation, and may be forced to engage militarily with Islamic State fighters.

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