Gold and oil prices plummet after ossama death
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Gold and oil prices plummet after ossama death
MARKETS around the world responded positively to the slaying of Osama bin Laden, with the death of the al Qaeda leader cutting prices for oil and gold.
Oil prices fell more than 3% – equivalent to $4.22 a barrel – as the news emerged that US forces had killed the world’s most wanted terrorist after almost a decade of operations.
Brent crude futures for June slumped to a low of $121.67 a barrel before bouncing back to around $124.40 by 12.25pm UK time. It came after Brent hit a 32-month high of more than $127-a-barrel in April.
Oil brokers said the drop was partly due to the public holiday, but also expectations with bin Laden’s demise the risk of attacks by Islamic radicals could decline and tension in the Middle East could ease, leading to lower oil prices.
The dollar strengthened in response to the news, having recently hit its weakest rates since mid-2008. However, analysts suggested it was a knee-jerk reaction by the market that was unlikely to last.
Precious metals, so-called “safe haven” investments, lost some of their lustre in response to bin Laden’s death. Spot gold fell to nearly $1540 an ounce yesterday after earlier hitting a fresh record high at $1575.79. By 12.19pm UK time it had reached $1552.35 an ounce.
Silver tumbled 13% in value, its steepest fall since late 2008.
The falls showed investors were willing to put money into riskier assets, thinking bin Laden’s death had removed some uncertainties hanging over world events.
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