Gold prices backed up their signs of resurgence today (October 26th), with new 28-year highs reached after a quiet week.
Once again oil prices were the trigger for investors to flock to buy gold, with crude prices soaring above $90 in response to worrying Middle Eastern tensions.
The friction between Turkey and Kurds in northern Iraq continued to simmer, while sanctions imposed on Iran by the US provoked fears of further conflict in the region and a consequent challenge to oil supplies.
Spot gold responded by rising as high as $778.70 per ounce, a new high since January 1980, while gold futures for December delivery enjoyed their own bull run, rising more than $10 to reach $781.10 per ounce.
Analysts from Action Economics told Reuters that the new high was achieved "on a combination of inflation concerns and safe-haven buying in the wake of a sensitive geopolitical environment and renewed concerns about the U.S. growth outlook".
They added: "Coupled with the prospect of further Fed easing this will continue to underpin gold," highlighting the potential for prices of the precious metal to rise further should the Fed continue to inject liquidity, risking an ever weaker dollar.