Home Markets News & Opinions Gold Price Notches Fresh Gains as U.S. Imposes Harsher Sanctions on Iran

Gold Price Notches Fresh Gains as U.S. Imposes Harsher Sanctions on Iran

Sam Bourgi
Last Updated September 23, 2020 1:02 PM

The price of gold rose along with the dollar on Friday after the Trump administration announced harsher sanctions on Iran over its alleged role in the attacks on Saudi oil facilities last weekend.

Gold Price Holds Above $1,500

Precious metals were higher across the board on Friday, as investors reacted to the latest geopolitical developments involving Iran and Saudi Arabia. Futures on December gold delivery peaked at $1,514.30 a troy ounce on the Comex division of the New York Mercantile Exchange. The contract last traded at $1,510.00 a troy ounce, having gained 0.3%.

Gold bullion
Gold holds above $1,500 an ounce amid mid-east tensions. | Chart: barchart.com

The yellow metal has seen a volatile stretch of trading since hitting new six-year highs earlier this month. This includes multiple instances of sub-$1,500 trading, the most recent being Thursday.

Silver traded mostly flat during the Friday session, with the December futures contract holding near $17.89 a troy ounce.

The U.S. dollar, which often trades inversely with precious metals, rose 0.3% against a basket of currencies. The DXY dollar index was last seen trading at 98.53.

Trump Administration Imposes Harsher Sanctions on Iran

President Trump announced Friday that the United Sates has imposed sanctions on Iran’s national bank in the wake of drone attacks on Saudi oil facilities last weekend.

“We’ve never done it at this level,” Trump said of the sanctions, as reported  by The Wall Street Journal.

Treasury Secretary Steven Mnuchin said the sanctions effectively cut off Iran’s last remaining source of funding.

Iran has denied involvement in the drone strikes that targeted Saudi Arabia’s Abqaiq oil facilities, which wiped out 5.7 million in daily crude production. Yemen’s Houthi rebels, which have been at war with Saudi Arabia since 2015, claimed responsibility for the attack.

The Saudis and its allies invaded Yemen to restore the government of Abdrabbuh Mansur Hadi, resulting in one of the biggest humanitarian crises since the Iraq war. After years of fighting, Houthis have maintained control of the country’s key population centers.