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SunSirs: Situation in the Middle East Leads to the Increase Demand for Precious Metals to Avoid Risks

January 07 2020 11:17:51     SunSirs (Linda)

The spot price of precious metals rose sharply on Jan 6. According to the data of SunSirs, the spot price of domestic gold was 355.23RMB/g, a daily increase of 2.52% compared with the quotation of 346.50RMB/g on January 3; the spot price of domestic silver was 4,435.67RMB/kg, a daily increase of 2.31% compared with the quotation of 4,335.67RMB/kg on January 3.

The demand for precious metals to avoid risks has increased, mainly due to the situation in the Middle East:

1. Trump threatened to strike 52 targets including cultural sites

U.S. air strikes on Baghdad International Airport killed Soleimani, who was was an Iranian major general in the Islamic Revolutionary Guard Corps on Jan 3. Iran said it would retaliate, and U.S. - Iraqi tensions escalated rapidly.

On Jan 4 (local time), Trump tweeted a warning to Iran that if Iran strikes any American or US assets, the US military will strike 52 important Iranian locations it has targeted.

‘It is war crimes to regard cultural sites as targets,’ Iranian Foreign Minister Javad Zarif said later on Jan 5, condemning the US president's threat to strike 52 of Iran's most important targets.

2. Iran announced to suspend the implementation of Iran nuclear agreement: no more restrictions on the number of centrifuges

After the US assassinated Soleimani, on the evening of January 5 local time, foreign minister Zarif sent a message on social media saying that as the fifth and final ‘remedial’ step, there will be no restrictions on the number of centrifuges in accordance with Article 36 of the Iran nuclear agreement.

This step is within the scope of the Iran nuclear agreement, and all five steps are reversible after the effective implementation of equivalent obligations. Iran's full cooperation with the International Atomic Energy Agency will continue.

Note: in July 2015, Iran reached a comprehensive agreement on the Iranian nuclear issue with the six countries on the Iranian nuclear issue (the United States, Britain, France, Russia, China and Germany). Under the agreement, Iran promised to limit its nuclear program and the international community would lift sanctions against Iran. In May 2018, the United States announced to withdraw from the Iran nuclear agreement and gradually resume the sanctions on Iraq suspended due to the agreement.

3. Iraq demands that the Security Council condemn the U.S. military, parliament's request for the withdrawal of foreign troops from Iraq

On January 5, the Ministry of foreign affairs of Iraq sent a letter to the UN Security Council and the UN Secretary General through the permanent representative of Iraq to the UN. According to the letter, the US air strikes on Iraqi military camps and assassinates Iraqi military leaders and senior friends in Iraqi territory, resulting in the death of Muhandis, deputy chief of the Popular Mobilisation Committee, several Iraqis and leaders with friendly relations with them, which is a serious violation of Iraq's sovereignty and a violation of the conditions for US troops to be stationed in Iraq. Iraq calls on the UN Security Council to condemn the bombing and assassination.

On the afternoon of January 5, the Iraqi parliament held a special meeting and reached a resolution on the issue of the US military in Iraq, which includes: the Iraqi government must no longer ask international organizations to help combat extremist organizations; the Iraqi government should strive to end the presence of all foreign forces in Iraqi territory.

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