Home Business Gold Touches Seven-Year High, Oil Surges as President Trump Warns of ‘Disproportionate’ Attack if Iran Retaliates
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Gold Touches Seven-Year High, Oil Surges as President Trump Warns of ‘Disproportionate’ Attack if Iran Retaliates

Gold touched a seven-year high and oil prices extended gains after tension between the US and Tehran escalated following the killing of a top Iranian military leader on Friday.Gold futures (GC1:COM) soared by $25.10 per ounce to $1,577, according to data compiled by Bloomberg. West Texas Intermediate futures (CL1:COM) also jumped by 1.6% to $64.04 along with Brent futures (CO1:COM), which were higher by 1.9% to $69.89.

President Trump warned of a possible “disproportionate” strike and referenced “52 sites” as targets if Iran retaliated against any American person or target in the aftermath of the killing of Major-General Qassem Soleimani last week in Bagdad. He also said the US had spent “billions of dollars” to build its base in Iraq and “we’re not leaving unless they pay us back for it.”

“They attacked us, & we hit back,” President Trump said in a tweet on Saturday. “If they attack again, which I would strongly advise them not to do, we will hit them harder than they have ever been hit before!”

On Sunday, the Iraqi parliament signaled that all foreign troops be ordered out of the country after a US-authorized drone attack killed Soleimani, reportedly the third-most powerful Iranian leader and one who, according to the US Department of Defense, was “responsible for the deaths of hundreds of American and coalition service members.”

On the same day, Iran, which has influence over the Strait of Hormuz through which a fifth of the world’s oil flows, reportedly unveiled another rollback of its commitments to a nuclear accord. President Trump reimposed economic sanctions on Tehran in late 2018 after unilaterally pulling the US out of the agreement, which was signed under the Obama administration.

Following the escalation of US-Iran tensions, British Foreign Secretary Dominic Raab called on Iran to seek a diplomatic route “out of the international cold” in a BBC interview on Sunday. The UK has ordered its navy ships to accompany British-flagged carriers, which have in the past year been subject to attacks in the Strait of Hormuz.

TPH Energy Research said in a research note on Friday that about 21 million barrels per day of global crude passed through the Strait of Hormuz, one of the world’s most strategically important choke points.

Iran’s supreme leader Ayatollah Khamenei warned of “harsh revenge” for the death of Soleimani, whose death has galvanized the country, with huge crowds on the streets of Tehran for his funeral.

The US Department of Defense said on Friday the killing of Soleimani was “aimed at deterring future Iranian attack plans.”

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