Does higher oil support strong precious metals markets?
*Financial Times, by Dave Shellock, March 2, 2011:
''Rise in crude propels gold to record high
Simmering tensions in the Middle East kept oil prices elevated and gold
at record levels, creating an extremely nervous and volatile backdrop
for equities amid concerns about the potential for rampant energy costs
to derail the global recovery.
Fighting between rebels and pro-Gaddafi forces in eastern Libya fuelled
fears that the country could descend into a long civil war, heightening
worries about prolonged supply disruptions. Nagging concerns that civil
unrest could spread further across the region added to the upward
pressure on crude prices.
'Persistent uncertainty in the Middle East-north Africa region
continues to support fears of contagion, while lost output from
countries like Libya and the increasing likelihood of a push back in
foreign investment is set to support longer-term prices even further,'
said Amrita Sen, analyst at Barclays Capital.
Gavan Nolan, credit analyst at Markit, said the market's main near-term
concerns centred around Saudi Arabia and Iran, Opec's two biggest
producers.
'The Opec plan is for Saudi to cover any supply shortfalls caused by
the unrest in Libya, so the potential for turmoil there will obviously
place upward pressure on the oil price,' Mr Nolan said. 'There are
signs that the contagion is spreading to Iran amid reports that there
has been a major crackdown on protests, though the government is
denying that any protests have taken place at all.'
Brent crude settled up $0.93 a barrel at $116.35 -- within sight of
last week's 29-month high near $120. West Texas Intermediate, the US
oil benchmark, jumped $2.60 to $102.23.
The latest spike in oil prices drove gold to a record peak above
$1,440.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
Call Now
Let us help you:
Personal Advisors
available now at
1-800-444-8317