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6 Jan, 2020 08:53

Oil rallies & gold hits 7-year high as tensions flare in the Middle East

Oil rallies & gold hits 7-year high as tensions flare in the Middle East

The escalating situation in the region following the assassination of a top Iranian military commander has given the yellow metal its highest rates in nearly seven years, and raised oil to prices last seen in mid-2019.

Gold, which is considered a safe haven investment amid political and economic turmoil, gained around 1.5 percent on Monday. At one point the precious metal hit $1,579.55 per ounce, the highest price since April 2013. As of 08:07am GMT it was already down to $1,571.95 per ounce - still around 1.3 percent more than in the previous session.

Rising US-Iran tensions could further boost gold prices, according to Goldman Sachs' projections. “All in all, we stick with our three, six and 12-month forecast of $1,600/toz (per troy ounce) but see upside risks if geopolitical tensions worsen,” its strategist said in a note Monday.

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Another precious metal, palladium, also rallied on Monday as it reached a record price of $2,011.48 an ounce, according to Reuters.

Crude prices have been on the rise since the news broke of Qassem Soleimani’s death in a US airstrike in Baghdad last week. Oil experienced further gains on Monday amid fears that a conflict in the Middle East could disrupt global oil supplies.

The US benchmark was up 2 percent, trading at $64.32 per barrel - its highest level since April. Futures of global benchmark Brent climbed more than 2.3 percent and topped $70 per barrel, reaching a peak not seen since May. The last time both Brent and WTI posted such large gains was in September, when an attack on energy giant Saudi Aramco’s infrastructure temporarily halved the kingdom's oil production.

Also on rt.com Middle East stock markets suffer losses, dragged down by US-Iran tensions

Washington and Tehran traded threats over the weekend, with US President Donald Trump vowing to respond in “disproportionate manner” should Iran “strike any US person or target.” He also said that the US could strike 52 Iranian targets, including cultural sites, should Iran attempt to revenge for Soleimani’s assassination.

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