Gold or black gold?
Take your pick, or buy some of each, as it looks like the precious metal and oil will be rocking over the coming months. Rising tensions over oil supplies from the Middle East have created a scenario in which gold and gold stocks should rise along with energy shares.
Gold is a good bet because investors have historically seen it as a safe haven in times of political and economic uncertainty. Oil is buoyant because a threat to its supply will drive up demand from other sources and, in turn, prices, which improves profit margins for companies in a position to make up the difference.
Oil prices are up 9 percent this year, worldwide, while gold rose6 percent in the month following the European Union’s announcement Jan. 23 that its members would embargo Iranian oil imports beginning July 1.
“Depending on the headline, the prices of gold and oil become more volatile as rhetoric and tensions with Iran escalate,” S&P Capital IQ said in a research note. But “investors could position their portfolios to potentially benefit in the longer term.”
The contretemps began over possible military dimensions to Iran’s nuclear program and that prompted European Union members to call for an embargo. About 18 percent of Iran’s oil exports supply the continent.Page 1 of 9 | Next Page