A Development that Could Upset the Balance in Gold and Silver! Economist Explains the Extent of the Risk.
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The renewed possibility of a hot conflict with Iran and the rise in oil prices have caused sharp fluctuations in the gold and silver markets. With the price of an ounce of gold falling below $4,000, the price of a gram of gold in Istanbul's Grand Bazaar dropped to 6,295 Turkish Lira. Economist Robin J. Brooks explained how every 10% increase in oil prices can put pressure on gold and silver.
The decline in gold prices, especially in the last month, has given investors cause for concern. Economist Robin J. Brooks calculated the relationship between gold and silver markets and oil prices. According to Brooks' analysis, a 10% increase in oil prices could lead to a 4% loss in gold and an 8% loss in silver.
The possibility of renewed armed conflict with Iran has increased the war risk premium in oil prices. Economist Robin J. Brooks noted that rising oil prices are putting pressure on gold and silver, drawing attention to the potential impact of renewed tensions on precious metals.
Economist Robin J. Brooks stated that tensions in the Middle East have added a war risk premium of over $25 per barrel to Brent oil prices, calculating that a 10% increase in Brent could cause gold to fall by approximately 4% and silver by about 8%. Brooks argued that these losses might be exaggerated and that precious metals could recover if the uncertainty ends. Gold fell 3.7% on Friday, dropping below $4,000 per ounce.
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