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Tuesday 15 June 2021
HomeWorldOil, gold, silver soar on Mideast unrest

Oil, gold, silver soar on Mideast unrest

Brent oil prices rose on Wednesday towards $116 a barrel, silver hit a 31-year peak and gold traded less than half a percent from its record, as more regimes in North Africa and the Middle East looked vulnerable to spreading protests.
Demand for safe-haven investments such as gold has surged along with oil prices, which were near last week’s 2-1/2 year high, as Libya stands on the brink of a civil war and protests intensified in Yemen, Iran and Oman.   

“If the contagion gets a little bit out of hand in Saudi Arabia or Iran, the results are not positive for equities and not positive for inflation. It’s an event that everyone is trying to avoid,” said Jonathan Barratt, managing director of Commodity Broking Services.

Libya could descend into civil war unless Muammar Gaddafi quits, the United States said on Tuesday, as pressure heightened on the longtime leader after news of Western military preparations.

In Iran, which produces around 4.7 percent of the world’s oil, there were reports that protesters clashed with security forces.   

These fears kept US Nymex Crude oil above $100 a barrel and Brent crude around $4 away from last week’s 28-month high.

“If it continues to spread, Middle East tensions may reach a point where a war could start and that could ignite an incredible rally (in oil prices),” said Ryoma Furumi, a commodities sales manager at Newedge Japan.   

By 0621 GMT Brent crude oil traded 42 cents higher at $115.84 a barrel, after hitting an intraday high of $116.36. US crude climbed 49 cents to $100.12, after closing the previous session at its highest level since September 2008.  

Investors worry that costlier oil could drag on the economic recovery, but Federal Reserve Chairman Ben Bernanke said on Tuesday the surge was unlikely to hurt the US economy unless it was sustained, even as investors sold off equities on fears of a slowdown.

Gold also benefited from the geopolitical problems in the Middle East and North Africa. Spot bullion hit an intra-day high of $1,434.45, just 20 cents below the record high hit in the previous session. It had since edged lower and quoted at $1,429.85.  

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