Goldman Sachs ( GS , quote) is warning of a a significant oil price spike in 2012 that could threaten world oil demand and economic growth. Should this happen, the price of gold ( GLD , quote ) will rise along with that of oil ( BNO , quote ), too.
In a recent article in the Financial Times by Gregory Meyer, "Oil bulls have reason to think high prices may get higher," it was detailed what will happen to the price of oil if the situation in the Middle East with Iran exacerbates.
Meyer warns that "A military confrontation, which is unlikely, could block the Strait of Hormuz, the Gulf tanker choke point. As Javier Bla, the Financial Times commodities editor, has reported, traders surveyed last month said a surprise Israeli attack on Iran and closure of the Strait could send benchmark Brent crude to $175 a barrel."
Should this happen, the price of gold (GLD) will probably climb along with the price of oil (OIL), due to global tension. Gold is a safe haven in times of global unrest.
And gold will rise with oil even if there are no attacks on Iran as rising prices for fuel will increase inflation, leading to a great demander for gold among investors, central banks and consumers.
For 2011, the exchange-traded funds for gold, SPDR Gold Trust (GLD), and oil, Brent Oil (BNO) are both up for the year.
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