Gold jumps to one-week high, silver little changed at $27.8625 an ounce

Gold climbed to the highest level in a week in thin holiday trading on reports that Iran produced its first nuclear fuel rod, spurring investors to buy the precious metal as a haven.

The bullion for immediate delivery gained as much as 3.2 percent to $1,613.40 an ounce, the highest level since Dec. 26, and was at $1,567.07 at 5:47 p.m. in Mumbai. Silver for cash delivery was little changed at $27.8625 an ounce.

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 phone 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. – Bloomberg

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Posted by Silver Guru on Jan 2 2012. Filed under Silver prices. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry