“The violent stand-off in Libya and elsewhere in the Middle East has triggered renewed speculation in precious metals and crude oil prices.
The price of gold jumped $17.60 an ounce today to $1406 an ounce– much nearer its previous peak over $1420. Silver, as well, jumped over $2.00 an ounce to $33.91, precisely the scenario to make silver traders ecstatic. Meanwhile, crude oil, the commodity most directly affected by the intense political unrest, ran up over 5% in price in London to $107.60 a barrel. The last time oil sold at this level was in 2008, just on the eve of an approaching bubble at the $148 a barrel level.
No doubt the pressure on oil prices was impacted by an oil workers strike in the Libyan oil fields, the cessation in exploration by BP, one of the major oil field operators there.
There were reports that some European oil producing companies like Italy’s ENI, long a fixture in Libya, are thinking of evacuating their expatriate oil workers.
Libya has the 9th largest amount of oil reserves in the world and is one of the lowest cost producing areas. A continuation of the shutdown in Libyan oil fields would mean a further spike in oil prices, and a threat to the rate of economic growth in Europe if not the US.
In other words, political unrest is a boon to speculators like hedge funds and wealthy investors betting the commodity prices are going higher.”
*This information is solely an excerpt of a third-party publication and is incomplete. Please subscribe to the referenced publication for the full article. 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.