Gold price rises to 3-week high

After a long period of decline, the gold price has risen to the highest level in three weeks. The demand for gold as a safe haven has increased due to unrest in the Middle East and tensions in Ukraine.

President Barack Obama authorized airstrikes in Iraq.  Russia responded to sanctions imposed by the European Union by announcing an import ban on food . The ceasefire between Israel and Hamas has ended early.

"Pretty much a perfect storm for gold prices," says David Govett, head of precious metals at Marex Spectron Group in London. "Resolutions seem a long way off. It is going to be all about headlines today."

"Obama authorizing air strikes against Iraq is likely to increase the risk-aversion in the market place and send gold prices higher," said Howie Lee, an investment analystst at Philips Futures Ltd. from Singapore. "Risks are now titled to the upside."

Source: Bloomberg