US belligerence and gold

Any relationship between war and gold is indirect. This is where those who believe that uncertainty is good for gold get it wrong.

In response to President Trump’s weekend bombing run against Iran’s nuclear facilities, traders in energy commodities and precious metals were keen to see how prices were affected when markets opened in the Far East this morning. They changed little.

Iran’s parliament passed a resolution authorising the leadership to close the straits of Hormuz, potentially sending a price shock to western markets. But that option appears unlikely, because very little of the Gulf’s oil goes to the US: it mostly goes to China and other Asians. Other than a price shock, nothing would be achieved other than making life difficult for Iran’s allies.