By Swansy Afonso - Jan 3, 2012 6:19 AM GMT+0700
Gold and silver gained after reports that Iran produced its first nuclear fuel rod, spurring investors to buy the precious metal as a haven.
Gold futures for February delivery advanced 0.2 percent to $1,569.70 an ounce at 6:18 p.m. in New York. Silver futures for March delivery rose 0.5 percent to $28.005 an ounce on the Comex. Gold rose 10 percent last year, the 11th straight annual gain, and silver dropped 9.8 percent.
A domestically made rod was inserted into the core of Tehran’s atomic research reactor after performance tests, the Iranian Students News Agency reported today, citing the country’s atomic energy agency. The Tehran reactor produces radioisotopes for cancer treatment, according to Mehr news agency. Nuclear fuel rods contain pellets of enriched uranium that provide fuel for nuclear power plants.
“Iran’s nuclear plans have raised fears that it is getting desperate and will take some drastic step,” Gnanasekar Thiagarajan, a director at Commtrendz Risk Management Services Pvt., said by telephone from Mumbai. “More sanctions are expected from the U.S. and other nations. This will have a positive impact on gold prices as ideally people would try to buy gold.”
The U.S. and allies are increasing pressure on Iran to halt what they say may be a covert nuclear weapons program. Sanctions signed into law by President Barack Obama on Dec. 31 aim to deter dealings with the Iranian central bank, and the European Union is considering a ban on imports of oil from Iran, the world’s third-largest oil exporter. Iran denies seeking to develop atomic weapons.
Reserves Climb
Gold reserves increased in November in Belarus, Turkey, Tajikistan, Macedonia, Mauritius and Morocco, and declined in Mexico, according to data on the International Monetary Fund’s website. Turkey’s holdings increased to 5.758 million ounces from 4.429 million in October, and Mexico’s declined to 3.413 million ounces from 3.417 million, the data showed. Morocco’s holdings were 710,000 ounces in November compared with 708,800 in October, according to the data.
To contact the reporter on this story: Swansy Afonso in Mumbai at safonso2@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
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