Gold and bitcoin surge with New Iran sanctions
Posted: Jun 29, 2019
With the US placing new sanctions on Iran, the price of gold and Bitcoin have seen a surge this week. On Monday the Trump Administration finalized and signed a new order that levy sanctions on the top Iranian military leaders, Supreme Leader Ali Khamenei and his offices. The sanctions have been put into place after the Iranian forces shot down a US drone just last week.
In response to the newly placed sanctions a spokesperson for Iran’s foreign ministry tweeted that the sanctions placed on the country by the Trump Administration signal the end and permanent closure of the path of diplomacy between the nations. With the tensions rising between the two countries, Gold and Bitcoin, which have both been seen as safe haven investments have seen prices rise, in a rally due to this. Gold has been seen trading extremely close to a new 6 year high, at $1,433.80 and Bitcoin saw a price rise of 2.9% against the USD and was trading at $11.363.26.
Chief Market Analyst at Markets.com said in a recent note that "Four things are really driving gold – falling yields, a weaker dollar, a soft macroeconomic outlook, and geopolitical risks rising in the Middle East." With the positive rally of the precious metal UBS raised their short term gold target to $1,430 on Monday up from their previous recommendation of $1,380. With the Bull Run in full force, the investment bank commented saying that a key factor in the rise is the sustained decline in rates, as well as uncertainty around growth and trade risks.
What we usually see in times of uncertainty and international tensions, is the price of gold often rises, as investors view the precious metal as a safe investment. Bitcoin’s price hike on Tuesday further extends a bullish run on the cryptocurrency in 2019. So far in this financial year we have seen bitcoin rise well above 150% against the dollar, and for the first time since March of 2018 the digital currency reached over $10,000. Analysts who monitor crypto currencies say that a lot of the positive momentum driving the price of bitcoin upwards is the release of Facebook’s new Libra Cryptocurrency project.
Gold and Bitcoin are not the only prices to be effected by the recent sanctions, oil prices are also facing movement in the opposite direction, seeing a falling price since the announcements. Over the course of the last fortnight oil has seen a positive incline as rising tensions between the US and Iran have escalated, however after the Trump Administration officially made an announcement Brent oil is down 0.2% and crude oil saw a decline of 0.1%
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