Gold has been on a high for some time, but nowhere as near as high as it’s been. Gold rallied fast following an Iranian attack on U.S. forces. The incident occurred at two Iraqi bases. However, President Trump was able to confirm that there were no casualties. So, they pulled back.
The reason for the attack was to avenge the killing by the U.S. of Iranian Gen. Qassem Soleimani. He was blamed for being the mastermind behind the murder of many American troops in Iraq. The incident causes an uproar to the point that it seems as though a new war may be coming our way. There were plenty of videos and posts on social media showing soldiers heading to airports and them kissing and hugging their families.
According to Trump in a tweet, “All is well!” He went on to say that there was an assessment on casualties and damages occurring and that so far, everything is fine. However, without hearing from the news, it’s hard to say if everything is actually going well across the seas.
On Tuesday, gold was able to an almost seven-year high before Tuesday evening of nearly $1,612 an ounce. On Wednesday, it was trading up 0.1 percent at $1,576 an ounce, slightly lower than on Tuesday.
Typically, investors will flock to gold when there are periods of geopolitical turmoil. When paper currencies are on the decline, gold is able to hold its value.
According to Jeffrey Currie, precious metals tend to go up during talks of war or forms of military escalations. Curries is the global head of commodities at Goldman Sachs. He believes that owning gold right now is a better hedge than oil. Since the death of Iranian Gen. Soleimani’s death, gold has gone up 3.1 percent while crude oil is only up 2.3 percent.