Gold prices have been in flux in recent months due to a variety of reasons, including economic woes, changes in oil prices, and world conflicts. But last night the world learned that United States forces killed Iranian Major General Qasem Soleimani in an airstrike. Now, Iran pledges “severe revenge” against the United States, and tensions are escalating in a fashion that may lead to a major war in the Middle East.
What does this mean for gold investors? The Middle East produces one third of the world’s oil, and if these critical resources are tied up in a bloody conflict then we could see major repercussions affecting households, businesses, and even personal recreation. If oil exports to the United States dry up from the Middle East, this could push oil prices to new highs. And this, in turn, could affect the prices of other commodities, including gold.
As the world reacts to the breaking news from Iran, we wait and see what this means for the United States and its interests both in the near term and well into the future. While war with Iran is the last thing anybody hopes for, the fallout from these escalating conflicts within the Middle East could spell a revival of sorts for the bullion market.