By Gavin Gibbon
Tensions between the US and Iran forcing the price of gold up to record levels
Geopolitical tensions between America and Iran are weighing heavily on the price of gold, with the precious metal forecast to hit $1,600 per ounce.
Gold already gained more than $50 in the opening trading days of 2020 to reach levels close to $1,580, which hasn’t been seen since 2013.
Jameel Ahmad, global head, Currency Strategy & Market Research, FXTM, told Arabian Business: “For as long as threats continue to be made by both sides, either the United States or Iran, the probability continues to increase that gold will target $1,600 level as a minimum as investors prepare for the worst scenarios potentially being on the table.”
On Friday, the US conducted a strike against a vehicle convoy in Baghdad and the Pentagon confirmed the death of Qasem Soleimani, Commander of Islamic Revolutionary Guards Corps-Quds Force and Abu Mehdi Muhandis.
Over the weekend, Iraq’s parliament voted to expel US troops, Iran announced it will no longer adhere to the 2015 nuclear deal limits and three Americans were killed in Kenya in an attack on a military base by a jihadist group.
The results of which pushed the price of gold up to its six-year high - gold prices went up to AED190.75 per gram ($1,477.50 per ounce) for 24 karat on Monday morning in Dubai.
Karim Merchant, CEO & managing director, of Pure Gold Jewellers, said the current instability meant it was a good opportunity to invest in gold.
“I believe the current US -Iran tensions have taken away the attention from the US-China trade war. On January 15, Donald Trump is supposed to sign the much-awaited deal with China on tariffs and that maybe a welcome relief for global economy,” he said.
“Add to this, if the tensions in the Middle East are contained, gold prices may stabilise or else, it will go higher than what it is today and may even touch the 2011 levels.”
The uncertainty has also impacted the retail industry, with customers looking to purchase before the price becomes too high.
KP Abdul Salam, group executive director, Malabar Group, said: “On a retail level, the continuous increase in price has made many consumers to make their purchase as there is a further expectation for the price to go up.”