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Gold Gains in Asia as Iran Nuclear Tension Spurs Haven Buying
<http://www.bloomberg.com/apps/news?pid=20601012&sid=aIbxQFD_4reA&refer=commodities#>

By Jesse Riseborough

Feb. 21 (Bloomberg) -- Gold rose in Asia as investors seeking a haven bought
the precious metal following the arrival of a U.S. aircraft carrier battle
group in the Persian Gulf region amid heightened tension with Iran.

The group led by the USS John C. Stennis arrived in the region Feb. 15 to
join the USS Dwight D. Eisenhower as the second aircraft carrier battle
group in the region, the U.S. Navy's Fifth Fleet said yesterday.
Disagreement over Iran's nuclear program boosted oil prices and helped push
gold to a 26-year high of $730.40 an ounce on May 12.

``The U.S. Navy is heading into the Strait of Hormuz, I am pretty sure they
are not over there for water-ski practice and a picnic,'' Peter McGuire,
managing director of Commodity Warrants Australia, said in Sydney today.
``With the ongoing issues in the Middle East I am expecting gold to be a lot
higher.''

Gold for immediate delivery rose as much as $4.20, or 0.6 percent, to
$661.45 an ounce, and traded at $660.38 at 4:05 p.m. Sydney time. In Japan,
gold for delivery in December 2007 fell 40 yen, or 1.5 percent, to 2,566 yen
a gram ($666 an ounce) at 4:12 p.m. Sydney time on the Tokyo Commodity
Exchange.

Some investors buy gold in times of political uncertainty. The metal jumped
5.3 percent after the Sept. 11, 2001, terrorist attacks on the U.S.

The British Broadcasting Corp., citing unidentified diplomatic officials,
reported yesterday that the U.S. has contingency plans to attack Iranian
nuclear sites if the Islamic Republic is confirmed to be developing a
nuclear weapon or is linked to a major strike against U.S. forces in Iraq.

Oil Prices

Gold has also been boosted by high oil prices this month as cold weather in
the U.S. and higher-than-normal gasoline demand pushed fuel consumption to a
14-month high.

``Whilst oil prices remain relatively strong, and there's a chance of an
increase in Middle East tensions, volatility will remain and gold is likely
to find its band of supporters,'' analysts from Investec Bank (Australia)
Ltd. said in a note to clients today.

Gold futures for April delivery rose as much as $4, or 0.6 percent, to $665
an ounce in after-hours trading on the Comex division of the New York
Mercantile Exchange. It traded at $663.60 at 4:11 p.m. Sydney time.

A futures contract is an obligation to buy or sell a commodity at a set
price for delivery by a specific date.

To contact the reporter on this story: Jesse Riseborough in Melbourne at
[EMAIL PROTECTED]
*Last Updated: February 21, 2007 00:16 EST*

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