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Gold Price Climbs Amid Libyan Revolution

Release Date: 
Tuesday, February 22, 2011

OLD PRICE NEWS - The gold price surged higher and stock prices tumbled amid the eruption of violence in Libya over the past two days. The price of gold has gained $13.00 over the past 48 hours, trading at $1,402 per ounce Tuesday morning. While gold has moved off the $1,408 high posted late yesterday, Dennis Gartman of the Gartman Letter, called the pullback a "buying opportunity."

A revolution in Libya is underway with the small African nation's citizens attempting to overthrow long-time dictator, Mohammar Quadaffi. Violence has claimed the lives of nearly 300 people according to various news sources with Quadaffi's son proclaiming that a "civil war" will result if the people do not stand down.

The surge in the gold price has paled in comparison to the spike in oil prices, which have gained a remarkable $6.88, or 7.9%, since Friday's closing level. Libya holds the largest oil reserves in Africa and the impending supply disruption has sent the global oil market to two-year highs.

Gains in the silver price have been explosive this past month, posting an 18.2% rise in February. Silver traded to fresh 31-year highs at $34.31 per ounce before pulling back to $33.20 this morning. Gold's sister precious metal claimed its highest price since the Hunt Brothers attempted to corner the silver market over three decades ago.

The revolution in Libya follows the overthrow of Mubarak in Egypt as well as uprisings in Tunisia, Bahrain, and Yemen. Geo-political uncertainty in the Middle East comes at a time of relative calm in financial markets. The gold price has been a laggard as compared to more cyclically-sensitive assets such as commodities and equities. Volatility has been low and investor sentiment extraordinarily bullish. It is too early to tell whether the trend has changed and counter-cyclical assets, such as gold, are set to take the lead, but the events in the Middle East represent a potential catalyst.

Unlike gold prices, the broader equity markets faced heavy selling pressure heading into the open on Wall Street. SandP 500 stock futures fell 15.10 to 1327.10.

Article provided by GoldAlert.com.


This article is independently provided by GoldAlert.com and does not represent the views or opinions of Goldline International, Inc. Although the information in this article has been obtained from sources believed to be reliable, Goldline does not guarĀ­antee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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