Gold gained in Asia, trading near a nine-month high, as rising tension surrounding Iran’s nuclear program spurred demand from investors seeking a haven. Tokyo gold futures reached a 21-year high.
The United Nations’ Security Council’s five permanent members are set today to discuss possible further sanctions against the Middle East’s second-biggest oil producer over the atomic issue. President Mahmoud Ahmadinejad yesterday compared Iran’s nuclear program to a “train with no brakes,” suggesting that it was unstoppable.
“Given the oil price and geopolitical concerns it seems to have stepped up a level, and has already looked to test $688 before it would move on to $700,” said Darren Heathcote, head of trading at Investec Bank (Australia) Ltd.
Spot gold rose as much as $3.40, or 0.5 %, to $685.95 an ounce, and traded at $685.40 at 12:05 p.m. in Sydney. The metal, which typically gains during times of geopolitical tension, touched $688.56 on 23 February, its highest since 19 May.
Iran, which refuses to stop enriching uranium, ignored a UN Security Council Resolution ordering it to do so by 21February. The country’s government says that it wants to develop the technology for research and to generate electricity. The US has said that Iran is developing atomic weapons.
The Security Council’s five permanent members, the US, UK, France, Russia, and China, plus Germany, will gather in London today for talks on a draft resolution that may impose further penalties on Iran. The UN voted unanimously on 23 December, barring Iran from acquiring materials or technology that might be used to build nuclear weapons.
President Ahmadinejad vowed yesterday that his country’s nuclear program will not be stopped. Iran “threw away a while ago the reverse gear and brakes of this train,” said the president, who was speaking at an assembly of religious leaders, according to the state-run Iranian Students News Agency.
Gold is expected to gain this week, its eighth straight weekly advance, on the Iranian standoff, according to 20 of the 27 traders, investors and analysts surveyed by Bloomberg News from Mumbai to Chicago on 22 February and 23 February.
Gold for April delivery rose $4.10, or 0.6%, to $689.80 an ounce at 12:19 pm. Sydney time in after-hours trade on the Comex division of the New York Mercantile Exchange.
Gold futures in Tokyo rose to a 21-year high for the third straight day. Gold for delivery in December 2007 gained 32 yen, or 1.2 %, to 2,690 yen a gram ($691 an ounce) at 12:26 p.m. Sydney time on the Tokyo Commodity Exchange.
A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.