Geopolitical tensions 'could support gold'

An increase in tensions between commodity producing countries could see gold prices increase in tandem with oil prices.

The two commodities generally rise in line with each other, while they operate in opposition to currencies such as the dollar.

Tension between Nigerian militants and oil producing companies caused a one dollar per barrel rise in oil prices earlier this week, after two pipelines were attacked.

Meanwhile, demand for buying gold has increased, particularly in developing countries such as India, with forecasts that this may increase further by August 15th, analysts at India's Parker Agrochem Exports told Reuters.

This could push gold prices up based on supply and demand fundamentals, whereby people are requesting gold that is in short supply.

Gold production has been increasingly affected in recent weeks in South Africa, where a number of strikes have caused as many as 90 per cent of the workforce to be absent on some days.

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