Friday, February 25, 2011
Time to Watch Precious Metals as the Middle East Explodes - By AVAFX
Is it time to watch and buy precious metals? Maybe… just maybe.
Silver continued its rally to a 30 year high, and gold climbed to a one month high as increasing unrest in the Middle East encouraged demand for precious metals as a safe haven.
Also, this past week, Egypt approved a request from Iran to send two naval ships through the Suez Canal. Meanwhile, in Bahrain, security forces attacked protesters for a second day. Gunfire broke out in Yemen's capital, Sanaa, as pro democracy demonstrations spread to Libya and Iran.
History shows, that when you see major world strive or turbulent markets, investors always flock to safe havens like gold and silver.
Silver futures for March delivery rose US72.6¢, or 2.3%, to settle at $32.296 an ounce on Friday, Feb. 18. Earlier that trading session, the price reached $32.87, the highest price for a silver contract since March 1980. For the week ending Feb. 18, the silver gained 7.7%, the most since early December. Silver traded as low as US$26.30 on Jan. 28.
Turning our attention to gold futures, for April delivery, the precious metal gained $3.50, or 0.3%, to $1,388.60 an ounce. Earlier, the gold reached $1,392.60, the highest since Jan. 13. The metal climbed 2% this week. Click here to read more about how silver and gold traded.
According to the World Gold Council, demand for gold bars and coins in the Middle East jumped 39% in the fourth quarter from a year earlier.
Over the past year, and especially since the Middle East turmoil has begun, silver has doubled, gold is up 24%, and platinum has gained 21%.
So, with the Middle East in turmoil, it might be a good idea to pay close attention to precious metals in the weeks ahead.
Click here for gold, silver, copper daily forecast outlook.