Change in precious metals

Gold price increased on Thursday, June 20th, 2019 as Iran shot down a U.S Military drone. The price of Gold (US: GC100) (+3.35%) rose $45.20 to settle at $1,390.60 an ounce. Based on the variations, the precious metal marked the highest percentage gain since 2016. Investors are still adjusting to the conclusion of the Federal Open Market Committee (FOMC). On the other hand, the meeting resulted in no change in U.S. interest rates. However, the FOMC stated that if the committee would lower interest rates in the coming months, then the U.S. economic growth begins to slow down.

 

Gold Price Within Five Years
Chart from Market Watch

Global Events

Gold began climbing higher in electronic trading after the Federal Reserve Monetary policy statement that followed the gold’s future settlement. The uncertainties of the trade war between the U.S and China has increased the tension of the issue. Precious metals like gold tend to interest buyers in a low-interest rate climate. Gold has gained over 2% week to date, as investors have bought the metal due to the uncertainty over an import tariff dispute. The tension between the U.S and China created fear of weakening the global economy.

Gold Price Today
Chart from Market Watch

The U.S-Iran Staredown

According to the Islamic Revolutionary Guard Corps, the air force shot down a U.S military drone in the Southern Coastal Region. Also, a missile struck a Saudi Arabian water plant, and Iran is at fault. President Trump may unleash some degree of a military operation against Iran. The act of aggression drive oil prices to increase and gold prices are likely to climb now that they have broken out of a five-year trading range.

Gold per ounce

Japan In Action

As of today, the bank of Japan left monetary policy intact and maintained a pledge to keep ultra low rates in place until at least Spring 2020. The January 2020 contract is now at 1.60%, which cause the dollar to pave its way for higher gold prices.

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