Rising geopolitical tensions and uncertainty have clearly demonstrated the value of Gold as a traditional defensive asset and store of wealth. At present there appear to be a number of factors that will support upward pressure on the price of gold.
Gold Tops $700, Oil Exceeds $71 on Iran Nuclear Plan Concern
"Gold jumped to $700 an ounce in New York for the first time since October 1980 and crude oil rose above $71 a barrel as tensions increased over Iran's nuclear- research program."
"Gold also gained on speculation central banks will sell their dollar reserves and buy gold. Some of China's economists are urging the country to quadruple its gold reserves to 2,500 tons from 600 tons, Reuters said, citing an official industry newspaper."
"A weaker dollar is also helping boost the allure of gold. The metal traditionally moves in the opposite direction of the currency."
"``People who are bullish on gold are doubtful the Fed is committed to fighting inflation,'' said Daniel Vaught, an analyst at A.G. Edwards & Sons Inc. in St. Louis."
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