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Gold, Oil modestly higher
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November 11, 1998: 10:13 a.m. ET
Commodities rising, but analysts say its not due to the Gulf threat
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LONDON (CNNfn) - Gold and oil prices rose modestly in European trade Wednesday but analysts played down suggestions that the threat of fresh military action in the Gulf was sending investors scrambling for a safe haven.
In afternoon trade December Brent Crude was up just 24 cents at $12.26 while gold was quoted at $293.75 up 30 cents from its Tuesday close in New York of $293.45.
Reports have said the United States is preparing for air strikes against Iraq for its failure to comply with the demands of United Nations weapons inspectors.
In times of military confrontation, investors usually buy gold as a safe haven investment, driving up prices. Action in such an oil-rich region would also normally drive up crude prices in the short-term.
In August gold traded at a low of $270.75 and as recently as last month it stood at $290.10.
But analysts struggled to explain why it's been rising.
"There doesn't seem to be anything in particular driving it," said Greg Hunter, gold analyst for Deutsche Morgan Grenfell in Johannesburg.
"There is no reason why it should stay strong but there is no reason why it should weaken either."
Rhona O'Connell, metals analyst with London-based specialist mining and oil securities house T. Hoare, played down any relation to the confrontation in Iraq, instead suggesting the strong dollar should be taking it lower.
"It's doing remarkably well considering the strength of the dollar," she said. 
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