Gold may be entering the summer doldrums, but it got a
pick-me-up at the tail end of last the week on news of conflict in
The yellow metal began climbing early Thursday, hitting
$1,273.80 per ounce from a starting point of about $1,260. Friday,
it improved upon those gains, reaching a high point of $1,277.50
before closing at $1,275.90. Meanwhile, gold futures for August
delivery settled at $1,274.10 on the COMEX division of the New York
Putting those gains in context, Kitco News
states that gold has reached its highest price since May 27 and
is now “testing that former support area around $1,280.”
What’s happening in Iraq?
Reports on the situation in Iraq are being updated constantly as
new developments occur, but it’s safe to say that the conflict
began Tuesday, when fighters with the Islamic State of Iraq
and Syria, an offshoot of al-Qaeda, took control of most of Mosul,
a city in Iraq’s north.
including Russia — are unsurprised at the development, The
notes that the attack was ”striking” in that it “exposed
the inadequacies of Iraq’s security forces, risked aggravating the
country’s already fraught sectarian divide and enabled the
extremists to capture large quantities of weaponry, much of it
Since then, the insurgents have continued pushing south, the
news outlet states in another
article, with the apparent end goal of capturing Baghdad.
Further tension has been created by comments from US President
Barack Obama, who said Friday that while he won’t send troops to
Iraq, he is reviewing other options,
Will gains continue?
It’s typical for investors to flock to gold during crises, and
that’s exactly what seems to have spurred the metal’s upward
movement last week. Unfortunately, gains of that type aren’t
Indeed, Robin Bhar, head of metals research at Societe Generale
cautioned that the June Federal Open Market Committee Meeting,
scheduled to take place this week, may put a damper on gold’s good
fortune. He told Kitco News, “[g]old has support from
geopolitical issues, but any macroeconomic improvement could cap
rallies. So I see gold sideways again. I don’t see the geopolitical
news as a catalyst out of $1,250-$1,275.”
Gold bugs had thus best enjoy the ride while they can.
Securities Disclosure: I, Charlotte McLeod, hold no direct
investment interest in any company mentioned in this