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Gold up $8 on Iran Nuclear Dispute

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Gold Prices Gain as Iran Nuclear Dispute Spurs Demand for Haven By Pham-Duy Nguyen Dec. 26 (Bloomberg) -- Gold rose the most in more than three weeks in New York after Iran said it would defy sanctions imposed by the United Nations and continue its nuclear program, boosting the appeal of the metal as a haven asset. The UN Security Council imposed sanctions on Dec. 23 for Iran's refusal to suspend uranium enrichment, which the U.S. and its European allies say is geared toward making nuclear weapons. Gold gained as much as 39 percent this year, partly because of the nuclear program dispute. ``Gold is reacting to the Iranian sanctions,'' said Frank McGhee, head metals trader at Integrated Brokerage Services Inc. in Chicago. ``It could continue to roar through here if the tension heats up.'' Gold futures for February delivery rose $8, or 1.3 percent to $630.30 an ounce at 8:51 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest one-day gain since Nov. 30. A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date. The metal is up 21 percent this year, heading for the sixth annual gain. Iran is the Middle East's second-largest oil exporter. Gold futures touched a record $873 an ounce in January 1980 after Iran cut supplies, doubling oil costs in a year and sparking a surge in the inflation rate. To contact the reporter on this story: Pham-Duy Nguyen in Seattle at [e-mail] . Last Updated: December 26, 2006 09:00 EST