Gold, Oil Rise As Israel's Netanyahu Said Iran Ran Secret Weapons Program
(Kitco News) - Commodity prices, particularly gold and oil have jumped higher Monday after Israel's Prime Minister Benjamin Netanyahu said that Iran ran a secret program to produce nuclear weapons.
In a speech on Monday, Netanyahu released thousands of pages of documents, which he said were copied from a "highly secret location" in Iran that detailed an effort to build nuclear arms.
He said the documents provided "new and conclusive proof" of the secret nuclear weapons program that Iran has been hiding for years from the international community in its secret atomic archive.
"After signing the nuclear deal in 2015, Iran intensified its efforts to hide its secret files,” he said. “In 2017 Iran moved its nuclear weapons files to a highly secret location in Tehran. "
The Prime Minister’s comments come less than two weeks before a May 12 deadline where U.S. President Donald Trump must decide on whether or not to renew a 2015 international nuclear deal made with Iran that was signed by, the U.S. China, France, Germany, Russia and the U.K.
According to some analysts, Netanyahu’s comments have increased the likely hood that Trump will pull out of the deal. Gold prices spiked to nearly unchanged on the day as Netanyahu started speaking.
While gold has come off slightly with the market still in negative territory, prices are well off the six-week lows seen at the start of the session. June gold futures last traded at $1,319.10 an ounce, down 0.32% on the day.
Gold has been under significant selling pressure as the market has faced surging momentum in the U.S. dollar and easing geopolitical tensions, reducing the precious metal’s safe-haven appeal.
However, analysts have warned that geopolitical tensions will flare up again if Trump pulls out of the international nuclear deal.
Despite the recent comments from Netanyahu, The International Atomic Energy Agency and other countries that signed the agreement have repeatedly confirmed that Iran is complying with the deal as it is written.
Netanyahu’s comments have had an even more significant impact on oil prices, with WTI trading near a one-week high.
If the Trump administration does not renew the international agreement, then Iran would once again face sanctions on its oil production, reducing global oil supplies.
WTI crude oil last traded at $69.10 a barrel, up 1% on the day. Rising oil prices were also positive for gold because it raised the risk of inflation overheating.