Gold Adds 1.5% as Oil Jumps, Stocks Wobble on White House-Iran Showdown

From Chris Mullen at GoldSeek.com...

Gold fell slightly late in Asia on Thursday and traded flat in London before it took off mid-morning in New York and ended near its high of $944.55 with a gain of 1.48%.

Oil rose on geopolitical worries caused by increased tension over Iran as they test fired more missiles.

Supply concerns also increased as Nigerian militants vowed to resume attacks due to Britain’s backing of the government in the conflict there.

Prices spiked higher in the last minutes of trade from a roughly 1% gain to an over $5 gain after the White House confirmed Iran’s test and stated that they will defend the gulf.

The US Dollar index fell and Treasury bonds rose on worries over the health of the financial system, plus news that continuing US jobless claims rose strongly last month. Initial jobless claims dipped last week.

The Dow, Nasdaq and S&P stock indices all rose after Bill Gross – head of Pimco, the world's largest bond fund – went on CNBC and denied early rumors that Pimco has reduced its exposure to Lehman Brothers.

Oil prices then spiked higher in the last few minutes of New York trade to record a $5 gain after the White House confirmed Iran’s latest missile test, and stated that the US act to will defend shipping and oil supplies from the Gulf.

Silver dropped to $18.02 before it rose to as high as $18.32 in New York and ended with a gain of 0.72%.

The Gold Price in Euros rose over €596, platinum gained $26 to $1989.50, and copper fell a couple of cents to about $3.73.

Gold and silver equities rose over 3% by midmorning before they dipped to see roughly 2% gains by early afternoon, but they then rallied back higher into the close and ended with about 3% gains.

Friday at 13:30 EST brings US Export & Import Prices for June, plus the Trade Balance for May – expected to show a $62.2bn deficit. Michigan Sentiment for July follows, with the Treasury Budget for June then expected at $33.0bn.

Yesterday the World Gold Council released figures showing that European central banks have until the end of Sept. to sell 203 tonnes of gold if they are to meet this year's quota under the current Central Bank Gold Agreement.

So far since Sept. '07 they have sold 297 tonnes of gold, well short of the annual 500-tonne limit very nearly met during both of the previous CBGA years.

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