Relief is widespread: US President Donald Trump has temporarily withdrawn his recently issued ultimatum against Iran. Trump had previously threatened to “destroy” Iranian energy infrastructure. However, this Monday, he ordered the ultimatum to be suspended for an initial period of five days. The markets reacted as expected.
Initially, the “energy ultimatum” had sent markets into a tailspin, and gold plunged intraday to the $4,100 per ounce mark, while silver crashed to approximately $61 per ounce. As soon as the postponement of the threatened bombardments was announced, both precious metals performed a U-turn and have nearly recovered their losses or are even trading in the green again (silver).
As great as the current relief is, the uncertainty among market participants remains just as significant. The US President justified the extension of the ultimatum by citing “constructive talks” with the leadership in Tehran. However, they deny that any direct talks with the USA are taking place at all.
A further crash of the markets and metals has therefore been averted for the time being, but it is impossible to foresee how long this interim recovery will last. As is so often the case with Donald Trump, uncertainty is the only real certainty.
