When gold fell February 7th by a decline of 3.8%, seeing the biggest decline in prices in over eight years, purchasing of the metal began to take off. With the demand in China already rising, gold purchasers saw this as an ideal opportunity to pick up the pieces, while the price was right.
As a market reaction to this event, according to sources at Bloomberg, "Gold for immediate delivery rose as much as $8.22, or 1.5 percent, to $559.67 an ounce. It traded at $558.59 as of 10:20 a.m. local time. "
Federal Reserve Chairman Alan Greenspan was quoted as saying that last week's high commodity prices had less to do with inflation and high commodity prices. It was implied that investors are buying gold as a haven due to "threat of international conflict."
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