Dangerous continues to upgrade! Is the gold market a buying opportunity right now, stoking the fire to stimulate the Iraqi economy?

International spot gold was trading at $1,563.40 an ounce in early Asian trading. Gold surged more than $30 to a high of $1,587.90 a Troy ounce on geopolitical tensions in the Middle East, but quickly pared gains to less than $10 as sentiment stabilized. The rapid escalation in the Middle East following the U.S. killing of Iran’s top general on Friday, particularly the U.S. military’s attacks on Hezbollah guerrillas in Iraq and Syria, could push Iraq further toward Iran. On Sunday, Iran announced a commitment to end restrictions on its nuclear program, as Iraqi lawmakers voted to expel U.S. troops. President trump’s latest tweet says Iran will never have a nuclear weapon. Meanwhile, in response to the U.S. military presence in Iraq, Arab sky news recently tweeted that Hezbollah in Iraq says it will turn U.S. air bases into ruins if trump insists U.S. troops stay. The news certainly spooked markets, and gold remained resilient.

The funeral of Iranian major general Omar Suleiman, who has beheaded in us airstrike, was held in Tehran on the morning of January 6, local media reported. Iran’s supreme leader Ayatollah Ali Khamenei, accompanied by President Hassan Rowhani and other officials, led a tearful prayer ceremony. Media reports said it was part of a state funeral.

The Iranian government says it will no longer comply with any restrictions on its uranium enrichment activities. The announcement followed the killing of a senior Iranian general, Suleiman, as a final step toward canceling the 2015 nuclear deal. But they also noted that Iran could resume its commitments if the United States lifts economic sanctions. President Donald Trump told lawmakers on Sunday that he was prepared to strike 52 Iranian targets “unequally” if Tehran retaliated against any us targets. In his latest tweet, Mr. Trump said Iran would never have a nuclear weapon.

Gold is a safe-haven asset that has benefited from a sudden rise in market uncertainty amid tensions between the U.S. and Iran. Gold surged to a near seven-year high in the previous session, while palladium breached $2,000 an ounce for the first time.

Bob Haberkorn, the senior market strategist at RJO Futures, said the market is nervous about the next step in u.s.-Iran situation, namely political risk and safe-haven buying of precious metals.

Benjamin Lu, the analyst at Phillip Futures, says the geopolitical risk is now the focus of the market. Rising tensions in the Middle East have pushed gold higher. After breaking through key resistance at $1,585 an ounce, gold then broke through a key psychological level at $1,600 an ounce.

Stephen Innes, the chief market strategist at AxiTrader in New York, said markets were looking for safe havens amid fears of an escalation following the current developments in the Middle East.

‘everyone is worried about the trade situation,’ said Peter Dragicevich, market strategist at Suncorp Group Financial in New York.

Analysts at Goldman Sachs point out that when geopolitical tensions are serious enough to cause a currency to fall, an escalation would push gold higher, while an escalation between us and Iran would push gold higher still. But if geopolitical tensions escalate further, demand for base metals will weaken and economic activity will be constrained.

The situation in Iraq “added chaos” to the situation in the Middle East, risk aversion continued to spread

Iraq’s engagement with the United States comes at a time when Washington and Tehran are at loggerheads, complicating the Middle East and spreading risk aversion. The Pentagon said on Monday that us generals had informed Iraq’s defense ministry in a letter that the us-led coalition would leave the country “as a mistake”. Us defense officials insist the troops will remain there. Earlier reports said the commander of U.S. forces in Iraq, William h. Healey iii, wrote to the Iraqi defense ministry Monday that the U.S. would deploy more troops to Iraq. The U.S. -led coalition will withdraw from Iraq.

On January 5, Iraq’s parliament passed a resolution calling on the government to expel foreign troops, AFP reported. The Americans then informed Baghdad on January 6th that they were ready to “pull out of Iraq”.The letter said the troops would “redeploy in the coming days and weeks to prepare for the next steps.” The pentagon was “in disarray” after the letter was made public. General Mark Milley, chairman of the joint chiefs of staff, said Mr. Healey’s letter was a draft and that releasing it would be a “mistake”.Iraq’s national assembly held a special session on January 5 and passed a resolution ending the presence of foreign troops in the country. The resolution calls on the government to work to end the presence of foreign troops in the country. At the heart of the resolution is a call for the administration to pressure the United States to withdraw from Iraq.

The resolution also calls for the Iraqi government to conduct the highest-level investigation into the U.S. airstrikes and to notify the national assembly within seven days of the findings.

On January 3, Qassim Suleiman, commander of Iranian cargo forces, and ABU Mehdi Mohandas, deputy commander of Iraq’s popular mobilization militia, were killed in a U.S. airstrike on Baghdad’s international airport.”The United States is disappointed by the action taken by the Iraqi national assembly,” state department spokesman Daniel Ortega said in a statement responding to the decision. Until the legal nature and consequences of this resolution are further clarified, we strongly call on Iraqi leaders to reassess the importance of the continued economic and security relationship between the two countries and the continued global presence in the fight against ISIL.”US President Donald Trump said on Monday he would impose sanctions on Iraq if it demanded our troops leave the country. The United States will not leave Iraq until the airbase is paid for in Baghdad.

“If they ask us to leave, or if we don’t leave in a friendly way, we will impose unprecedented sanctions on them,” Trump told reporters aboard air force one. It will make our sanctions on Iran look mild. We have a very expensive air force base there. It cost billions of dollars to build. It was built long before I took office. We won’t leave until they pay us back.”Mr. Trump added: “if they are hostile and do what we think is inappropriate, we will impose sanctions on Iraq, very strong sanctions on Iraq.”The next step is to keep a close eye on events in the Middle East, where any unexpected news could spark another upheaval.

Prospects for gold

Wayne Ko Heng Whye, head of research and education at Fullerton Markets, wrote on Monday that gold had climbed as high as $1,588 an ounce, its highest level since 2013. With risk aversion likely to persist for some time, gold prices have retreated from their highs and investors are likely to buy gold when prices fall.

Credit Suisse expects support for gold to continue even before the recent escalation in us-Iran tensions. By 2020, the average price of gold is expected to be around $1,570 an ounce.”We expect geopolitical factors to persist and maintain our forecast for gold to average around $1,570 in 2020, still well below the all-time high of $1,900 reached in 2011,” Credit Suisse said.

George milling-Stanley, the chief gold strategist at Wall Street’s global investment advisory firm, says gold’s rally is sustainable as conflicts unfold in the Middle East. Gold’s rally is sustainable because we don’t know what will happen next, and we live in an era of unprecedented uncertainty that will support gold prices. People had hoped for a quiet start to 2020, but it wasn’t.

Mr. Miller-Stanley expects gold prices to fluctuate between 1,550 and 1,650 by 2020. Despite a 3.5 percent rise in the first few days of the year, the market is not showing it is overbought. He also stressed that 2020 would be a year of uncertainty, with the Middle East crisis, the pending us-china trade deal and the UK’s Brexit plan as catalysts for gold.

Spot gold was trading at $1,563.40 an ounce at 9:10 a.m. Beijing time.

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