• 287 days Will The ECB Continue To Hike Rates?
  • 287 days Forbes: Aramco Remains Largest Company In The Middle East
  • 289 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 689 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 699 days Big Tech Disappoints Investors on Earnings Calls
  • 700 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 701 days China Is Quietly Trying To Distance Itself From Russia
  • 702 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 706 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 707 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 709 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Tesla Struggles To Compete In European Market

Tesla Struggles To Compete In European Market

Tesla continues to catch the…

Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

  1. Home
  2. Markets
  3. Other

Will Gold, Silver and Oil Prices Soar on Social Unrest In The Middle East?

An unexpected specter is haunting the streets throughout the capitals of North Africa and the Middle East. Although revolution has been quelled for many years, dollar devaluation has caused prices of basic goods to soar in emerging economies like these. Young people are unemployed and face little opportunities in autocratic societies. Tens of thousands of young, leaderless Arabs are rioting in the streets demanding an end to pro-Western leaders. Egypt's stock market (EGPT) has been shut down as reports are showing that the rioting will intensify, and many people and businesses are fleeing the country.

This hunger for change is sweeping across the Arab world and has already begun with the ousting of the president in Tunisia. Today, older protesters are joining the youth in Egypt and will face tear gas, bullets, and beatings as the riots intensify. Many fear that the old pro-Western despots will fall and new radical anti-Western governments will take control. In truth, the protests are happening throughout the Middle East but often they are being suppressed by iron-fisted governments. This is the shocking and unexpected news that is arising seemingly out of nowhere and is sure to affect our commodity investments.

Readers should be aware this could well be the surprise "swan" of 2011; it could be what galvanizes the charts of yellow (GLD) and black gold (DBO). Fear, crisis, and the inevitable flow of capital out of such turbulence compel money to flee to the stability of precious metals. This may be a game-changer in 2011; the US is not getting overly involved and social unrest is increasing throughout the Middle Eastern world. Many fear that these countries -- which are suffering from soaring inflation and high unemployment -- may come under the control of fanatical parties with ties to radical organizations. It is important to monitor the ETFs that follow this area, such as the Market Vectors Gulf States Index ETF (MES), WisdomTree Middle East Dividend (GULF), and SPDR S&P Emerging Middle East & Africa (GAF). This economic and social unrest could cause contagion throughout the Middle East; the major shift in the balance of power could cause oil prices (DBO) and gold prices (GLD) to soar.

It is too early to tell what's caused the seemingly spontaneous uprising of youth in the Arab world or what role the "Byzantine Hand" of Iran is playing to ferment all of this. Consider that Tunisia is in danger of being overthrown. Egypt is ablaze with hate for the ailing President Mubarek; his son, Gamal, who is supposed to be his designated successor, fled Cairo to England with his wife and daughter on Tuesday. Lebanon has been taken over by Hezbollah, which is directly armed and financed by Iran. Yemen, Morocco, Algeria, Libya, and Jordan are all facing similar protests sparked by difficult economic times. Emerging economies in the Middle East are having to deal with massive unemployment and soaring costs.

Tehran would like nothing better than to add Middle Eastern insurrection to the strains that already beset the United States such as high unemployment, bankrupt cities and states, and a declining fiat currency. We do know that Iran dreams of reviving the centuries-old "Great Caliphate." This is an empire stretching from North Africa to Persia. I will be carefully watching the effect that this ongoing drama will have on my firm's mining stock selections and bullion investments. For the past few days I have been warning about a reversal in gold (GLD) and mining stocks (GDX). Could revolution in North Africa and the Middle East be the spark in precious metals and for oil's next leg higher?

 


Partake in my free 30 day trial at http://goldstocktrades.com/premium-service-trial to receive my daily technical intelligence reports.

 

Back to homepage

Leave a comment

Leave a comment