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Monday, 24th July 2006 (5119 views)

As the United Nations, the United States and other Western powers began to offer out olive branches over the weekend, analysts predicted a stable short-term future for the price of gold on Monday (24th July).

Political tensions in the Middle East had led to fears over a massive regional conflict when Lebanese militants and Israeli forces exchanged fire throughout last week.

The events heightened fears that neighbouring oil giants would become embroiled in the battle, which in turn would lead to rising oil prices and therefore a hike in the price of gold.

However, the involvement of several peacemakers in recent days have quelled fears that the troubled region was set for a massive stand-off as neither side appeared to have too many supporters.

According to a Mineweb report, London's Standard Bank said: "The unwinding of the hefty security premium slapped on the traditional safe haven asset [gold] is likely to continue as the [Middle East] situation seems to be stabilizing."

On Monday, July 24 gold was trading at around $612 an ounce and would remain steady at this price, provided there was no reason for further political alarm, according to market analysts.

 

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