Gold prices hit an all-time high on Monday (20 May) following the premature death of Iranian President Ebrahim Raisi and the announcement that Saudi Arabia’s King Salman had fallen ill.
Uncertainty over the mineral-rich region prompted gold to reach $2,438.5 per troy ounce, according to Nasdaq.
Raisi, Iran's Foreign Minister Hossein Amir-Abdollahian and other Iranian officials were killed in a helicopter crash near the Azerbaijan border on Sunday (19 May), the same day that Saudi Crown Prince Mohammed bin Salman postponed a visit to Japan due to King Salman’s medical tests.
Oil prices also rose amid the news of King Salman’s illness, but later fell back.
Raisi created an “isolated” Iran
While Iran and Saudi Arabia boast substantial gold reserves, political upheaval in both countries is not the only reason for spiralling gold prices, according to David Kurtz, head of mining and construction analysis at GlobalData.
“Broadly speaking, gold prices were up anyway and had already been hitting all-time highs this year,” Kurtz tells Mining Technology. “Gold reached $2,400 per ounce from expectations that interest rates will be cut in the second half of 2024, cooling US inflation and previously higher jobless data in the US.”
As with rising gold prices, Iran has blamed US sanctions for the helicopter crash, with former Iranian Foreign Minister Javad Zarif pointing to restricted access to aviation parts.
“I don’t think the death of President Ebrahim Raisi caused any major spike as such, but geopolitical tensions are generally supporting gold at the moment,” Kurtz adds.
Domestic volatility has also driven Iranians to avoid keeping their savings in cash or deposit accounts – preferring gold as a protection against Iran’s weakening rial currency.
Iran’s international isolation has been deepened by questionable human rights practices, many of which were perpetrated by Raisi.
“During Raisi’s presidency, personal, social, ideological and political freedoms were more suppressed than ever, leading to widespread pressure on the people and general disillusionment,” a leading campaigner for protest organisation Women For Iran tells Mining Technology.
“The value of Iran’s currency has plummeted, there was widespread poverty, unemployment and financial embezzlement by the government and other wings of the regime,” the campaigner, who wishes to remain anonymous, adds. “Moreover, Iran’s international relations deteriorated, the regime became more isolated, the value of the Iranian passport plummeted, and the migration of educated and skilled individuals increased significantly.”
Human rights groups including Amnesty International have accused Raisi of crimes against humanity, notably including his hand in the 2019 crackdown on protests across Iran, during which the Iranian Revolutionary Guard Corps (IRGC) and other security forces killed 321 people.
International condemnation followed, and economic restrictions were subsequently imposed on Iranian oil, gold and other commodities.
“The ‘Woman, Life, Freedom’ movement sparked after Mahsa Amini's murder was brutally suppressed and subjected to widespread killing when Raisi was president,” Women For Iran’s campaigner says. “Many protesters were killed, blinded, or imprisoned, and numerous executions were carried out.”
Iran’s Supreme Leader Ayatollah Ali Khamenei may have declared five days of national mourning for Raisi yesterday (21 May) but, for some, the death of the so-called ‘Butcher of Tehran’ has sparked celebration, not grief.
Should a brief and perhaps coincidental rise in gold prices be Raisi’s departing legacy, many Iranians will deem it more than he deserved.
