When it comes to gold price developments, stock exchange transactions or the current oil price, the connection to the USA and its economic and financial policy is always a logical, because short and coherent way. Somewhere and somehow the United States, its US dollar and its problematic relationship with the rest of the world are always shimmering. The “renewed conflict” between the United States and Iran once again seems to have its own dynamic. This measure of strength in the Arabian Gulf and the continuing tensions in the Middle East, the most important production location and transportation hub in the world, have an impact on all economic areas of the global economy. In other words, the fear of further war-like acts, such as the acts of sabotage against four merchant ships in the United Arab Emirates and the targeted killing of the Iranian general Ghassem Soleimani, which was ordered by US President Donald Trump, have led to trading on the stock exchanges with raw materials (oil, gold, etc. ), Stocks and currencies put on alert.
Oil and gold – so different and yet so the same?
The severe aggravation of the conflict between the United States and Iran is new evidence that gold and oil are responding to political tensions. But do they do it in step? When looking at the foreground, the two most valuable raw materials on earth unite price creation through supply and demand as well as their significant price increase in times of crisis. One thing is certain, the prices for oil and gold are rising steeply. So are gold and oil the possible “war winners” of the spiral of aggression and retaliation in the Gulf region? An analysis shows that this thesis is only partially correct and, above all, makes it clear that oil and gold do not react equally and, above all, do not react equally long to war and supply fears.
Oil price
After Trump’s attack on the Iranian general on January 3, 2020, the price of oil has skyrocketed. Investors are stocking up on crude oil and driving the oil price to its high since May 2019 ($ 63.84 / barrel; 159 liters of Brent). It even surpassed the September oil price high ($ 69.16) after Saudi oil plants were set on fire by Iran. The world held its breath. Knowing how incalculable the American president makes foreign policy. His reluctance to speak, and the maintenance of economic sanctions against Iran to the more “light military response” of its senior leader, Ali Khamenei, cautiously gave the markets new hope. A war of unequal weapons seemed to be averted for now. The price of oil sometimes fell below the level before America’s drone attack on Iranian General Soleimani.
Gold price
The crisis currency gold also reacted with a record high in US dollars and also in euros. Gold was quoted at $ 1,613.30 per troy ounce (31.103 grams). Nevertheless, gold is not a “war winner” in the real sense, like its black counterpart, oil. The military-political escalation makes oil more expensive. As ironic as it may sound to the co-initiator of the Iran conflict, the fracking oil of the Americans. Even before the Iran conflict escalated, gold was in a longer-term upward trend (see gold price trend 2019), sometimes at a 6-year high. The current oil price (Brent) in USD per barrel is USD 65.43. The current gold price per troy ounce is $ 1,560.20.
Born 1981 in Strasbourg, is a freelance journalist for various online media throughout Europe, focusing on finance, real estate and politics. He gathered his professional expertise as a consultant for global players and medium-sized companies. Fournier studied economics and german in Paris and Dresden. He currently lives in Saarland and has been a member of the Euro Leaders team since the beginning of 2019.