Brent crude oil futures surged over 5 percent to $108 per barrel Monday, while West Texas Intermediate light, sweet crude oil rose over 6 percent to $91.42 per barrel. The former product has outpaced the latter in recent weeks, largely because the Brent futures are more euro-zone focused, which means they're more sensitive to unrest in the Mideast.
Gold futures rose 1.33 percent to $1,407 per troy ounce, breaking through the $1,400-per-ounce resistance level. Silver climbed even more, increasing nearly 5 percent to $33.87 per troy ounce.
"You've got to be very concerned, particularly because it can affect the oil price, and if you have the oil price spike up another $20, $30, you could reenter a global recession," Bill Belchere, global chief economist at Mirae Asset Securities, told Bloomberg Televison.
Indeed, some do locate part of the blame for the 2008 financial meltdown in the record prices crude oil hit during that year. Rising construction, food and fuel costs put pressure on household budgets, leading to reduced spending and less growth in the housing markets.
The situation in Libya continues to evolve rapidly, with criticism coming from many angles and Libyan Air Force pilots defecting to the island state of Malta. Libya is the first major oil exporter to be hit by the popular protests that engulfed Tunisia, Egypt and other Arab states, and it's also seen the most violent repression. Hundreds have died already, with reports that demonstrators have seized armaments and tanks from military bases while fighter jets have bombed groups of protesters.
Though there's no confirmation yet, rumors persist that Colonel Muammar Gaddafi, who has ruled the Mediterranean nation for over 40 years, has fled to Hugo Chavez' Venezuela. That would effectively mean the end of the Gaddafi regime unless his son Saif al-Islam can rein in the popular rage.
However, there are indications that the Libyan government is fracturing, as ministers flee the country or resign around the world. In New York, Libya's deputy representative to the United Nations, Ibrahim Dabashi, rebuked the government.
"We are sure that what is going on now in Libya is crimes against humanity and crimes of war," Dabashi said. "We find it is impossible to stay silent and we have to transfer the voice of the Libyan people to the world … We state clearly that the Libyan mission is a mission for the Libyan people. It is not for the regime. The regime of Qaddafi has already started the genocide against the Libyan people.
Meanwhile, investors seem eager to store their wealth in assets that will preserve value in chaotic times.
"At the moment safe-haven buying tends to be the way the market is going," Afshin Nabavi, the head of trading and physical sales at gold refiner MKS Finance, told the Financial Times. "It’s all because of the Middle East and the situation doesn’t look like it is getting better."
However, Nabavi doesn't see this trend leading into massive physical demand for the metals yet – rather, it appears to be constrained to the futures markets: "The rally has been too quick for any physical demand to take place. Until the market settles down a little bit, physical demand as such will not continue."
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