Gold rose to a 25-year high in Friday morning trading in New York as increased tension between Iran and the U.S. spurred investors to buy the precious metal as a haven and a hedge against inflation, Bloomberg reports.
The U.S., U.K., and France are trying to get support in the United Nations Security Council for a resolution demanding Iran quit enriching uranium. Oil prices have surged to a record on concern exports from Iran, the world’s fourth-largest producer, may be disrupted, stoking inflation, Bloomberg reports.
Gold futures for June delivery rose $4, or 0.6 percent, to $680.50 an ounce at 9:31 a.m. on the Comex division of the New York Mercantile Exchange, Bloomberg reports. Prices earlier reached $687, the highest since October 1980.
“Gold may rise to $1,000 before June should the situation in Iran intensify,” Bernard Sin, chief trader at Geneva-based MKS Finance, a precious-metals trading and refining company, told Bloomberg.
Officials from AngloGold Ashanti Ltd., the world’s third-largest gold producer, Harmony Gold Mining Co., Africa’s third-largest gold producer, and Barrick Gold Corp., the world’s largest gold producer, all reportedly said that the market for gold will continue to rise.
Iran would probably retaliate for any military strike against its nuclear facilities by trying to choke off oil shipments through the Strait of Hormuz, military planners reportedly said.
The U.S., U.K., and France yesterday circulated a draft UN resolution that demanded Iran “suspend all enrichment-related and reprocessing activities, including research and development.” The three countries have said Iran is developing nuclear weapons, a charge Iran has denied. Iranian Ambassador Javad Zarif reportedly said the resolution is “extremely unhelpful” and that Iran doesn’t respond to “threats and intimidation.”
Marc Faber, author of a newsletter called The Gloom, Boom & Doom Report, said Thursday that gold is becoming the “global currency of choice.” Gold may surge to $6,000 an ounce in the next decade, and possibly to as much as $10,000 depending on U.S. monetary policy and the level of the Dow Jones Industrial Average at that time, he reportedly said
Faber told investors to bail out of U.S. stocks a week before the 1987 Black Monday crash.