Spot gold prices rallied to $2,449.89 per ounce (oz) on Monday before paring some gains, with the price surge following a broader rally across metal markets. Other precious metals also saw a rise in prices, with silver surging to $32.75 per oz – its highest price in 11 years. Wall Street is predicting that the price of the yellow metal could hit $2,500 per ounce soon.
Gold prices had previously rallied to record highs in April amid fears of a war between Israel and Iran, and it's expected that the prospect of more instability in the region following Raisi's death could push the price of the precious metal even higher.
"Investors traditionally see gold as a 'safe-haven' in times of market uncertainty to hedge risks and as a store of value," Russia Today wrote. "For thousands of years, [gold] bullion has been turned to amid economic instability, stock market crises, military conflicts and pandemics."
Some experts indicated that continued strong buying from China had also underpinned prices. DNYUZ expounded on the matter, noting that "Chinese customers have flocked to gold as their confidence in traditional investments like real estate or stocks has faltered. At the same time, the [People's Bank of China] has steadily added to its gold reserves while whittling away at its holdings of U.S. debt." (Related: China STOCKPILING gold as Chinese investors and consumers remain cautious of real estate and stocks.)
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Moreover, analyst expectations of interest rate cuts by the U.S. Federal Reserve were also cited among the factors that could be boosting the price of gold. Dick Poon, general manager at Heraeus Metals Hong Kong, nevertheless told Reuters: "Geographic tension environments are getting complicated."
Raisi, several others dead in helicopter crash
Raisi, the leader of the Islamic Republic of Iran, died in a helicopter crash on May 19 in the country's northwestern East Azerbaijan province. Before the disaster, he had traveled to the border region after joining Azerbaijani President Ilham Aliyev the day before to inaugurate a dam.
According to the state-run news agency IRNA, the crash that killed eight people – including three crew members – happened in the Dizmar forest in the province. Raisi wasn't the only one who perished in the incident. Iranian Foreign Minister Hossein Amir-Abdollahian and East Azerbaijan Gov. Gen. Malek Rahmati were also on the ill-fated helicopter.
The Associated Press (AP) wrote that Raisi was seen as a protege and potential successor to Ayatollah Ali Khamenei, Iran's supreme leader. Despite the president's loss, the Ayatollah publicly assured Iranians that there would be "no disruption to the operations of the country."
The Islamic Republic's constitution mandates that upon the death of a sitting president, the country's first vice president will act in the position for the time being. In this case, Iranian First Vice President Mohammad Mokhber will serve as acting president – with Tehran mandated to hold elections for his replacement within 50 days.
Several nations extended their condolences to Tehran amid Raisi's death. Aliyev, the last world leader Raisi met before the ill-fated flight, offered any support necessary. Saudi Arabia meanwhile issued a statement saying it stands by Iran "in these difficult circumstances."
The U.S. Department of State also issued its condolences in a statement but added a caveat about its rocky relations with Tehran. "We reaffirm our support for the Iranian people and their struggle for human rights and fundamental freedoms," the statement added.
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Watch financial commentator Mario Innecco explaining why the dollar is in trouble with rising gold prices in the clip below.
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