Futures Markets: Contracts for Gold Surge on Worries About Middle East
Gold futures prices surged in active trading, spurred by strong buying on cash markets and continued political tensions in the Middle East.</br></br>Much of the cash-market buying came out of the Middle East, analysts said. Also, speculation that the U.S. and some of its allies may soon seek to reduce interest rates sparked fears of a further U.S. dollar decline, driving investors into gold instead.</br></br>"This is the first time in over a year that we're seeing a concerted period of strong physical accumulation" of gold, said William O'Neill, director of research at Rudolf Wolff Futures Inc., New York. Jeffrey Nichols, president of American Precious Metals Advisors, White Plains, N.Y., said of the long-depressed gold market: "The cadaver is up and walking again."</br></br>Reports that a U.S. Navy task force led by the aircraft carrier Saratoga has begun patrolling the Mediterranean have "raised fears in Arab circles that if there's another terrorist incident, the U.S. may take some military action against Libya," said Bernard Savaiko, senior precious metals analyst for PaineWebber Inc., New York.</br></br>After soaring more than $10 an ounce, gold futures for February delivery on the Commodity Exchange in New York closed at $350.70 an ounce, up $9.70. Many other contracts rose more than $10 an ounce. Gold led Comex silver futures for March delivery 13.5 cents an ounce higher, to $6.21. Platinum futures for April delivery on the New York Mercantile Exchange rose $6.20 an ounce to $370.70.