The Iran war prompts dealers to get rid of gold…and investments decline by 5%
The volume of investment in gold decreased during the first quarter of the year, sector data showed on Wednesday, after it forced Warin the Middle East Some investors were forced to sell their properties to provide liquidity.
The volume of investment decreased by 5% during that period, according to the Globalgold, despite gold prices recording a record high in January, with investors seeking a safe haven in the face of the weak dollar and the fluctuations of US President Donald Trump’s monetary policy.
Investing in gold
The Council stated in its quarterly report that "Large outflows in March largely offset strong inflows during January and February" In Investing in gold, which is an easy way to invest in the precious metal.
This was particularly linked to funds in North America.
Juan Carlos Artigas, an expert at the World Gold Council, said "Gold is often sold first when liquidity is needed, due to its wide acceptance"
In light of the war that began with the joint US-Israeli attacks on Iran on February 28, Tehran closed the Strait of Hormuz, through which a fifth of the world’s oil and liquefied natural gas usually passes.
High oil and gas prices
This led to a sharp rise in oil and gas prices and caused confusion in the markets, forcing many investors to provide liquidity to settle their investment positions.
The possibility of the US Federal Reserve raising interest rates in response The increase in inflation increased the strength of the dollar, which made gold more expensive for investors who do not own the US currency.
Despite the decrease in demand for gold in terms of quantity, the value of purchases jumped by 62%.
Record level for gold prices
The price of gold reached a new record level, approaching $5,600 per ounce at the end of January, and its average reached $4,873 per ounce during the first quarter.
Despite this, high prices affected, Largely driven by investment holdings, it negatively impacted demand for jewelry.
The jewelry market was affected by the war as the Middle East is a major shipping hub.
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