Tags: gold | Syria | oil | metals

MarketWatch: Syria Isn't the Only Reason Oil and Metals Are Marching Higher

Friday, 30 Aug 2013 10:55 AM

By John Morgan

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It is easy to believe that the media and political frenzy over Syria is the only reason for sharp rises in gold, silver and oil. But a MarketWatch analysis concludes other factors, such as the latest re-run of the federal deficit crisis, are also having an impact.

"Anytime the U.S. is faced with acts of aggression against foreign countries such as Syria, it creates fear," said John Person, president of NationalFutures.com.

And that fear factor often leads to buying of commodities such as precious metals and energy, with the conviction they will be safe havens in a tumultuous world.

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If the United States and its allies conduct a military strike against Syria because of that nation's use of chemical weapons, the act could in fact spark a wider Mideast conflict, potentially endangering oil supplies and driving investors toward precious metals as a hedge.

But MarketWatch said analysts it contacted said investors should also look at other reasons for the run-up in gold, silver and oil prices.

Some of those reasons include uncertainty surrounding the U.S. debt ceiling, stock market volatility and global currency turmoil, as well as an economic recovery in some areas.

"Rising economic growth, especially as Europe recovers from their recession and China growth stabilizes with some modest monetary easing, will likely provide a positive demand scenario for oil," Robert Haworth, senior investment strategist at U.S. Bank Wealth Management, told MarketWatch.

Jan Skoyles, head of research at The Real Asset Co., said the run-up to the October budget war in Washington would provide some support for both gold and silver.

Mark Faber, author of "The Gloom, Boom & Doom Report," told Hard Assets Investor he expects gold will eclipse its 2011 high of $1,921 per ounce in coming years.

"Looking at the fundamentals, looking at how debt will continue to increase and how central banks will continue their monetization not only in the U.S. but on a worldwide scale, I assume the price of gold will trend higher. Most likely we've seen the lows below $1,200," he said.

Global investor Jim Rogers, a frequent bull on commodities, told Reuters, "I own oil, I own gold, I own things like that, and if there is going to be a war, and it sounds like America is desperate to have a war, they're going to go much, much higher."

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