Ben Bernanke, today's most powerful banker, said last week that nobody really understands gold prices, including himself. Victorian Europe's richest man, and bullion broker to the Bank of England, N.M.Rothschild at least took the trouble to check.
Precious metal prices rose Tuesday morning in London, after the finance minister of Cyprus said selling some of the debt-laden Mediterranean island's gold reserves was "only an option" for raising cash.
Gold had a strong week last week, up by more than 5%, its biggest weekly advance in nearly two years. This was despite the gold price falling back slightly on Friday. Silver gained 5.8%, its biggest weekly increase since September last year.
Gold and silver got hit badly, which tells us that investors think this is no more than overbought equity and bond markets unwinding. As long as no one is seriously considering systemic risk, they are unlikely to flock to gold or silver.
In this interview, Fadel Gheit discusses the effect of Middle Eastern geopolitical issues on oil production, dissects the changing oil and gas production situation in the U.S. and explains how the shift in natural gas prices has turned the refinery business from the industry's perennial ugly duckling into a beautiful swan.