The events in the Middle East are having a noticeable effect on oil and gold markets. Prices for precious metals as well as oil have climbed.
Tornike Samkharadze, Executive Director of Zaraphana, says that gold prices for producers have surged in recent days due to the escalating conflict around Iran.
"With the onset of the military conflict in the Middle East, the price of 1 ounce of gold has surged by roughly $300. This reality has increased prices for industrial gold. In recent days, the cost of 1 gram of pure gold has climbed by GEL 13 becoming a challenge for the local production. If global prices continue their upward trend, an increase in goods prices is unavoidable. But we have no plans to raise our product prices at this stage," Tornike Samkharadze notes.
In his words, as geopolitical risks escalate, gold prices surge, as investors seek out safe assets in such situations, and the precious metal proves to be the most trusted asset during crises.
As of today, one ounce of precious metal is trading at $5387, the price of gold has grown by approximately 80% year-on-year.
The cost of oil has also gone up. The transit of merchant and cargo ships through the Strait of Hormuz is now completely paralyzed. The strait, which handles a fifth of the world's oil supply, was closed by Iran's Islamic Revolutionary Guard Corps in response to persistent attacks from Israel and the United States.
Presently, one barrel of Brent crude oil is valued at $79. However, analysts believe that in case of a long-term military confrontation between Iran, Israel and the US, the price of oil could rise to $100 per barrel.
