Gold News

Gold rises on Iran's nuclear sanctions

Gold has risen strongly in light trade since London re-opened on Wednesday.

Recovering its mid-December range around $630, it has also come into play as a "safe haven" after the UN Security Council voted on Saturday to impose sanctions on Iran due to its nuclear program.

"The market is now focusing on Iran and a slightly weaker Dollar to buy gold after seeing that it was solid around $620," said a trader at Mitsubishi Corp in Tokyo to Reuters on Thursday.

"The outlook for gold remains firm as the holiday-thinned conditions are expected to persist for the rest of the week," agreed Standard Bank in a report, "with recent developments in Iran likely to provide temporary safe-haven support."

Standard Bank says it expects gold's uptrend – now entering its sixth year of consecutive gains in terms of all major currencies – to continue in early 2007. Merrill Lynch has also restated its 2007 gold forecast of $675/oz, and raised its forecast for the following 3 years to an average of $650/oz.

But investors relying on Wall Street forecasts would do well to remember that two-thirds of the global gold market is driven by jewelry demand, with Indian consumers the world's No.1 buyers.

This week the World Gold Council (WGC) said it has chosen Bangalore to host its first-ever business-to-business jewellers show in India, the South India Jewellery Show (SIJS), in mid-February. "[That] month would provide a platform for the participants to place orders and receive their stocks well ahead of the marriage season in south India as well as to meet demand arising during the auspicious Akshaya Trithiya day,” one of the organisers noted to the Times of India.

It's not all chains and ear-rings, however. In fact, India's central bank may become a major force in the gold market in 2007. The story begins in England, and ends in Mumbai. To read it now, click here...

Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn



Market Fundamentals