NEW YORK — Gold prices soared to a 2 1/2-month high in active trading Monday amid heightened tension in the Persian Gulf and the threat of a mining strike in South Africa.
Gold was sharply higher worldwide. On the Commodity Exchange in New York, gold closed up $13 from late Friday to $477.10 an ounce--the highest level since May 20, when it traded at around $480, according to Bernard Savaiko, a senior metal analyst for Paine Webber.
Republic National Bank in New York at 4 p.m. EDT quoted gold bullion at $477.00 an ounce, a $13.25 gain from late Friday.
In London, gold closed at $472.50 an ounce, up $11.10 from Friday, and in Zurich, Switzerland, it traded at a late bid $474.00, up from $463.00. Earlier, in Hong Kong, gold was up $5.81 from Saturday to $470.79 an ounce.
Several factors contributed to gold's escalation, Savaiko said.
"First, there was a lot of buying reflecting political concern . . . that the Persian Gulf war between Iran and Iraq would spill over to other Persian Gulf states," he said.
Gold is a haven for investors and speculators in times of international turmoil. But it's also considered a hedge against inflation, which could be rekindled by higher oil prices in the wake of increased tension in the oil-rich gulf.