4 minute read - Published 14:30 PM EST, Monday May 20, 2024
This article was authored by Peyton Baird of witan nook.
Last night, gold reached a record high of $2,454.20 on June Comex futures, while silver hit an 11-year high of $32.75 per ounce on July Comex futures. This surge in prices, as suggested by multiple analysts including Jim Wyckoff of Kitco, is being driven by safe-haven demand as geopolitical concerns intensify.
Gold Futures | Google Finance
The catalyst for these geopolitical uncertainties was announced last night at around midnight in New York. It was confirmed by Iranian state media that the territories President Ebrahim Raisi and Foreign Minister Hossein Amirabdollahian had died in a helicopter crash, reportedly an Agusta Bell AB-212, while traversing the Dizmar forest, a mountainous region of Northern Iran. They had been returning from an inauguration ceremony of the Qiz Qalasi border dam which had also been attended by President Ilham Aliyev of Azerbaijan.
A Bell AB-212 Helicopter | Wikipedia
In response to President Raisi’s untimely death, Supreme Leader Ali Khamenei, in accordance with the Iranian constitution, announced that Presidential elections would be held in 50 days and that first Vice-President Mohammad Mokhber has been appointed resident of the Islamic Republic.
President Raisi and President Aliyev inaugurate the Qiz Qalasi dam | President.ir
This event certainly increased geopolitical uncertainty, and for two main reasons. Firstly, the Israel–Hamas war is heavily influenced by Iranian leadership, which is one of Hamas’ top beneficiaries in terms of equipment, intelligence and strategy. The overall direction of the conflict will certainly be impacted by the extent of Iranian involvement, which is now in question as a result of the abrupt leadership change. Secondly, President Raisi’s death will lead to a power struggle in Iran, not just for the country’s Presidency, but also for the country's top position as Supreme Leader which Raisi was thought to be a top contender for. The power struggle that will take place in the top echelons of Iranian society will happen in tandem with increased societal unhappiness and civil disobedience, as a portion of the Iranian populace does not support the government, and sees any show of instability or weakness as a reason to protest to promote their own idea of revolution.
Adding to the increase in geopolitical tensions, a Chinese oil tanker was hit by a Houthi missile in the Red Sea. Previously, the Yemeni Houthis had granted China (and Russia) safe passage into the Red Sea, so this attack appears to be an unfortunate and expensive accident.
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