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Gold Prices, a “Fear Trade” Continue to Rise

According to Bloomberg News, gold prices continue to rise, after recent news about Iran’s nuclear development:

Gold futures headed for the biggest gain in 10 weeks on increased demand from investors after reports that Iran produced its first nuclear fuel rod and as the dollar weakened. Silver also gained.

A domestically-made rod was inserted into the core of Tehran’s atomic research reactor after performance tests, the Iranian Students News Agency reported yesterday. The dollar fell against the euro on signs that manufacturing is expanding in the U.S. and China. Blackstone Group LP’s Byron Wien, who had correctly predicted last year’s gain in gold, said bullion will rally 15 percent in 2012 to $1,800 an ounce.

“Fear trade is back because of Iran,” Adam Klopfenstein, a market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Also, we are seeing buying across commodities because of the weaker dollar.”