Commodities Recovery were gripped this week by the threat of military strikes in Syria, with NY oil hitting a two year high on the fears of wider conflict, experts said.
Gold jumped to multi-month peaks, as many investors parked their cash in the precious metal that is widely regarded as a safe haven in times of geopolitical turmoil.
Matt Basi, CMC Markets Analysts said” Commodity prices have been in sharp focus this week as the debate over Western Intervention in Syria intensifies”.
“Speculation that a strike was imminent sent oil soaring higher earlier in the week as concerns rose over increased instability in the area, but prices have cooled in the past 2 days as political opposition to intervention rises.
Basi said “Investors have generally shunned equity markets and flocked to the perceived safe haven of gold, though the yellow metal has dipped back beneath $1400 per ounce going to the close as Friday profit taking comes into play”.
The market increased on Wednesday in anticipation of Western military strikes on Syria, with NY crude striking $112.24 per barrel, which was the highest level since early may 2011. Brent oil soared to $117.34 a barrel, last seen in late February.
Prizes then fallen back on Thursday and Friday as prospects receded for an imminent strike against Syria over its alleged use of chemical weapons.
Carsten Fritsch, Commerzbank Analyst said” Oil prices continues to be under the spell of the Syrian Crisis”.
Although the Syria is not a major oil producer, traders are nervous about a broader conflict in the crude-rich Middle East Region that includes neighboring areas of Iraq which is becoming a major exporter.
United States thoughts an international coalition for a limited strike on Syria suffered a blow when British Lawmakers on Thursday voted against the use of force.
Fritsch added “ after the house of Commons in the UK failed initially to approve Britain’s participation in a military strike against Syria, the pendulum is now rotating back in the direction of declining risks”.
He added that “Gold has re-emerged over the last few weeks as the preferred safe haven asset for investors”.
Commerzbank Analysts “ Metal Prizes have come under pressure from the pull of falling of equity markets, growing geopolitical risks and a firmer US Dollar”.
The commodities recoveries beat bonds, stocks as well as dollar for a third month, the longest successful streak in two years, as the prospect of military strikes boosted oil and gold. The Emerging markets have decreased as the currencies plunge from Brazil to Turkey to India,