Iran-US Tension Knocks Price of Gold to a 7-Year High

Gold currently moves at its highest price in almost seven years, while global equities took a downward slide among recent political tension involving Iran and the United States of America. The price of Gold increased as much as 2.3% this week to $1,580 a troy ounce, its highest price rate since April 2013.

This subsequently caused a spike in shares for manufacturing firms, as Newmont Goldcorp scaled 1.1% and Polyus International advanced 2.3%. Speaking on this trend, Natasha Kaneva, commodities analyst at JPMorgan, said: “Markets tend to overreact to geopolitics when trading is thin, as it has been during the post-holiday period, but investors are right to fret about what is happening in the Middle East.”

“…..investors are right to fret about what is happening in the Middle East.”

Natasha Kaneva JPMorgan

Aditya Pethe, director of Waman Hari Pethe, is of the opinion that: “Demand could slow down because of the sudden jump in price, but once it stabilises, people will resume buying.” Though Goldman analysts currently believe that Gold may still be a preferrable choice compared to oil at the moment, several experts suggest that the markers to watch in deciding where to invest is the political situation between Iran and the US.