Gold Spot Price Open: $1,241
Gold Spot Price Close: $1,252
Change in Gold Spot Price: +$11
Silver Spot Price Open: $19.91
Silver Spot Price Close: $20.26
Change in Silver Spot Price: +$0.35
Gold and silver actually managed to post some minor gains after what was, in truth, a pretty bad day for precious metals. In the early morning and overnight hours of Monday gold and silver experienced heavy losses due to a major geopolitical event taking place on Sunday in Geneva. When all was said and done, gold gained a little over 11 dollars while silver managed to pick up 35 cents.
Though this week was originally expected to be a quiet one, a major geopolitical development took shape on Sunday and flipped this week’s market expectations upside down. Iran, along with 5 of the world’s biggest, most influential nations reached an interim agreement with regard to Iran’s uranium enrichment program and the sanctions currently being levied against the Middle Eastern nation by the West.
Iran has for a long time now been pursuing the enrichment of uranium for what it says are strictly peaceful, energy harnessing purposes. Unfortunately for them, however, the US and many of its allies have, for quite some time, not even began to buy into the notion that Iran seeks to enrich uranium for peaceful purposes alone. Instead, the US and the rest of the Western world are and have been convinced that Iran is actively attempting to construct nuclear weapons. Because of this belief held by the West, all sorts of economic sanctions have been placed upon Iran for a long time now; sanctions that are effectively crippling the Iranian economy.
The temporary 6-month agreement reached on Sunday will see economic sanctions lifted in exchange for Iran’s cooperation with regard to uranium enrichment restrictions. The lifted sanctions will allow Iran to reclaim over $7 billion in frozen crude oil-related funds among other welcomed changes to the aviation and auto industries. During the duration of the 6 month agreement, leaders from Iran and the West are supposed draft a long-term deal with regard to Iran’s uranium enrichment program. If a deal is not reached within 6 months we may see many of the now lifted sanctions put back in place. The possibility of more crude oil (Iranian crude oil) on the market in the near future caused oil prices to fall on Monday while many stock markets around the globe performed well.
Safe-haven demand for gold and silver is also on the decline because the interim agreement seems to have decreased the high level of volatility most often associated with the Middle East, especially Iran. Decreased safe-haven demand coupled with the currently bleak outlook for precious metals is part of the reason we saw gold sink to 5 month lows in the early morning hours of Monday. Though the market has since corrected itself, the chances of gold and silver making substantial gains anytime soon seems more unlikely with each passing day.
