Gold soared to record highs due to the plane crash in Iran: how the price has changed

Darina GertsevaNews
The price of gold has reached a historic high
The price of gold has reached a historic high. Source: Created with the help of AI

The price of gold reached an all-time high of $2450.07 per ounce, showing a 1.4% rise in price due to expectations of a looser monetary policy by the Federal Reserve and geopolitical tensions in the Middle East. This followed a decline in inflation in April and news of a helicopter crash with Iranian President Ibrahim Raisi on board.

Recent trading has shown that traders are raising bets on a possible reduction in the Fed's borrowing costs as early as September, which has supported the rise in gold prices.

The price of gold has risen sharply

This comes as inflation fell in April, which was much higher than expected, pushing the dollar down and Treasuries up. The price of gold also rose due to rising geopolitical tensions.

On May 19, a helicopter carrying Iranian President Ibrahim Raisi crashed in thick fog, increasing the sense of risk across the region. Shortly after this incident, an oil tanker heading to China was hit by a Houthi missile in the Red Sea, further heightening tensions.

"Gold's rally is news-driven because of the uncertainty over what happened in Iran," said Nicholas Frappell, global head of institutional markets at ABC in Sydney. This uncertainty and rising geopolitical risks have led to increased investment in gold, which is traditionally considered a "safe haven" in times of crisis.

Declining inflation and a falling dollar have created favorable conditions for the metal's price to rise. Gold, which is priced in dollars, has become more attractive to investors amid the weakening of the US currency. In addition, hopes for lower borrowing costs by the Federal Reserve have increased the attractiveness of gold as an investment, as this metal does not pay interest.

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