Gold Soars As Arab Sheiks, Chinese Central Bank Start Buying

by: Gary Dorsch

Gold has been on an upward trajectory since November 5th, when IAEA chairman Muhammad ElBaradei confirmed Israel's assessment that Iran is only a few months away from creating an atomic bomb. "If Tehran indeed resumes its uranium enrichment in other plants, as threatened, it will take it only several months to produce a bomb. On the other hand, any attempt to resolve the crisis by non-diplomatic means will open a Pandora's box."

Arab sheiks in the Gulf region have sought a safe haven in gold. After a $45 per ounce correction to $495 in December, Gold found new buyers anticipating China´s decision to diversify some of its $555 billion held in US dollars into other currencies. Beijing might shun the Euro and yen, because of super easy money policies pursued by the ECB and Bank of Japan, and instead opt for a "hard" currency such as gold or silver: