Middle East Conflict Spurs Commodity Demands
Ratcheting geopolitical tensions in the Middle East spurred demand for commodities Friday, as investors looked to safe-haven metals like gold and silver and anticipated rising oil prices.
Friday, August 8, 2014 - 00:00
US President Barack Obama authorized airstrikes against the Islamic State of Iraq and Syria (ISIS), several news sources reported. ISIS surged out of its bases in Syria in recent months, capturing cities, towns and major installations in Northern Iraq. The Pentagon said the bombing was intended to protect US civilians still working in Iraq, as well as safeguard refugees from the Yezidi religious/ethnic group who have fled from the advance of ISIS and are now clustered around Mount Sinjar.
ISIS "have called for the systematic destruction of the entire Yezidi people, which would constitute a genocide," Obama said late Thursday, Bloomberg reported. "The United States of America cannot turn a blind eye."
Spreading crises put investors on edge
Escalating military conflicts, particularly in the Middle East, tend to drive investors toward so-called 'safe haven' investments.
On Friday morning, Comex gold futures contracts for September delivery were up $0.30 to $1,311.10 per ounce. September silver futures climbed 2 cents to $20.010 per ounce.
The news also impacted oil futures, as traders worried that further war and conflict could impact supply from the second-largest-producing OPEC nation. West Texas International light sweet crude oil futures climbed $0.27 to $97.61 per barrel.
"US approval of airstrikes moved the conflict to a new level, and made its extreme potential for danger in the region visible," Eugen Weinberg, Commerzbank's head of commodities research, told Bloomberg.
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