Hawaii Six O - Gary Wagner
Safe Haven Appetite Soars as Iran Vows Retaliation for Last Night’s Drone Attack
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Gold futures are currently trading up $23, with the most active February contract currently fixed at $1551.10, this is a 1.51% gain on the day. Today’s dramatic rise in gold prices is a direct response to actions in the Middle East last night. Without a question this is one of the strongest safe-haven moves we have seen in quite some time.
According to an article in the New York Times, “Iran’s top security and intelligence commander was killed early Friday in a drone strike at Baghdad International Airport that was authorized by President Trump, American officials said.”
The article reported that “General Suleimani was the architect of nearly every significant operation by Iranian intelligence and military forces over the past two decades, and his death was a staggering blow for Iran at a time of sweeping geopolitical conflict.”
A statement by the Pentagon said that “General Suleimani had orchestrated attacks on coalition bases in Iraq over the last several months,” including the one that killed the American contractor last week. General Suleimani also “approved the attacks on the U.S. Embassy in Baghdad.”
This action caused gold and oil to immediately spike higher, and U.S. equity futures selloff overnight. While gold remains strong maintaining much of its gains that came in throughout the night, the Dow Jones industrial average which opened down roughly 300 points is now down 200 points with six minutes left in trading today.
Last night’s action certainly has generated heightened geopolitical tension with Iran vowing to retaliate against the United States for this recent action. The United States immediately has sent an additional 3000 troops to the region, and sent out a warning that all United States citizens should immediately leave Iraq.
Almost immediately there were massive protests in the streets of Iran, with civilians carrying printed signs pictures of Qassem Soleimani, leader of the foreign wing of Iran’s Islamic Revolutionary Guard Corps.
The vast majority of political analysts and market commentators believe that this action is the beginning of major escalation in the Middle East. There is no question that Iran’s promise to retaliate for this action will result in a continued escalation in the Middle East conflict. The question is how and when the rogue nation will retaliate.
This drone strike occurred after protesters broke into the United States Embassy compound in Baghdad, on Tuesday. According to the Pentagon last night’s drone attack was in response to the multiple attacks on coalition bases over this past several months as well as the attack on the U.S. Embassy earlier in the week.
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Wishing you as always, good trading,
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