This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Gold Prices Gain on Geopolitical Unrest

WASHINGTON ( TheStreet) -- Gold prices are moving higher on Monday as unrest in the Middle East continued to make gold an attractive investment for stability-seeking investors.

Gold for April delivery was rising $4.10 at $1,413.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,417 and as low as $1,407.90 during Monday's session. The spot gold price was up $3.10, according to Kitco's gold index.

Gold prices still have yet to conquer their 2011 intraday high of $1,418 an ounce and technical traders will be watching a break through at that level to determine if they want to put new money to work.

Open interest on the Comex on Friday was down 5,200 contracts but still "well over 500,000," says Georgeo Gero, senior vice president at RBC Capital Markets, which indicated long positions staying in the market.

"I think there is a high probability that we are going to hit gold's old high of $1,434 an ounce , says Phil Streible, senior market strategist at Lind-Waldock, "it's just a matter of when. I think it could be easily in the next couple of weeks."

In addition to being a safe haven investment for those looking for cover as political unrest in the Middle East continues, gold is also an inflation hedge. The Eurozone reported January inflation at 2.3%, higher than its mandate of 2%. The European Central Bank is meeting Thursday to discuss interest rates.

The debate about whether to raise interest rates will no doubt take center stage at the meeting especially as oil prices rise, but aggressive action isn't expected and, if anything, it just draws more attention to the fact that inflation is heating up globally.

Brazil's inflation rate is almost 6%, Russia's is at 10%, China almost 5%, U.K. almost 4% and even if central banks raise rates as Russia and China have done recently, it will take a lot of hikes to return to a positive interest rate environment.

In the meantime, a weaker U.S. dollar should support higher gold prices in the midst of any profit taking. The U.S. dollar index was down 0.40% to $76.95.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AEM $29.14 -3.22%
AUY $3.89 -3.23%
EGO $4.95 -2.75%
HMY $1.88 -0.53%
AAPL $124.24 0.70%


DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs