Oil rises as Ramadi falls as this markets price action continues to defy the calls for an oil price crash. ISIS forced Iraqi security forces to flee the largest province in Iraq despite help from U.S. air support.
Tuesday Sept. 6, 2011 was wet and windy, both in London and gold. Late Asian trade had seen the wholesale gold price rise 1.4%, reaching $1,921 per ounce. Prices then turned lower, and by the time New York opened the air was hissing out of gold futures.
Comex gold inventories have plunged more than 36% year to date, creating a market more leveraged than it has been for the last nine years. Inventories are down from 11.059 million ounces to 7.034 million ounces today.
Commodities, energy, gold and silver are safe havens that usually rise in value during international conflicts and war.The ramifications of increased involvement in the Middle East could have a major impact on global trade.
Wholesale London prices for physical gold jumped $15 from a drop to $1,384 per ounce Tuesday morning, gaining after the Interfax news agency in Russia reported two "objects" being fired in the Mediterranean, towards the sea's eastern coast.
Gold and silver consolidated this week, following an explosive $30 rise for gold ($1.20 for silver) last Friday. In precious metals markets there has been a change in sentiment from extreme bearishness to “don’t know.”
It is amazing to me that investors believe there is no inflation or risk of energy price spikes as the Middle East deals with geopolitical turmoil and civil war. That complacent mindset may be changing rapidly.