What Impact Will Pulling Out Of The Iran Deal Have On Gold?

Iran is about to get hit with fresh U.S. imposed sanctions. Here’s what gold (and silver) investors need to know about what this means for gold…

We know that to skirt the sanctions, Iran was involved in an “oil for gold” scheme with Turkey, in which Iran would give Turkey oil, and Turkey would pay for it in gold.

Details of the scheme can be read in this post.

The point is that Iran will not be given access to Western payment clearing systems such as SWIFT, and in order for the nation to purchase needed goods and services from other nations who may or may not respect the sanctions, Iran will likely be paying in gold for those goods and services.

Which makes sense that Bloomberg is writing that Iran’s demand for gold should be strong for the next few months:

Iran’s gold demand will probably be “strong” for the next few months and then gradually decline as U.S. sanctions start to take effect, according to the researcher who covers the country for Metals Focus Ltd.

After a previous set of sanctions was imposed on Iran in 2012, it took two years for the country’s gold demand to start falling, according to data from the World Gold Council. It sank to only 45.1 tons by 2016, the lowest in at least six years and 65 percent lower than in 2013, according to gold council data. It rose to 64.5 tons last year.

Why would the demand be strong?

Because it is a way for Iran to build up a “savings” account if you will.

And there is arguably no better savings than gold.

Unless your a Silverbug.

Also notice from the Bloomberg excerpt that gold demand remained strong for two years.

Now, initially they say it will be strong for a few months, but then they go on to say demand really didn’t drop off for two years.

So what is going on?

Just a little gold-bashing. That’s all.

Remember, the MSM and especially the mainstream financial press can never, ever say anything good about gold. Ever. Especially Bloomberg.

Back on track.

What is the take-away from U.S. imposed sanctions on Iran?

It’s just one more fundamental factor that supports the bullish case for gold.

So, in a way, President Trump may be doing some good things for gold after all.

I mean, trade wars are good for gold.

And sanctions on Iran increased Iranian demand for gold.

And currency wars are good for gold.

So between a soon to come break-out in the United States, and with what is expected to be a strong gold buying season for both India and China, we can now add increased Iranian gold demand to the mix.

Oh yeah, and don’t forget to add in sovereign demand – from the likes of China, Kazakhstan, Russia and Turkey.

And we’ve got the making of very robust demand on a very large scale.

Stack accordingly…

– Half Dollar


About the Author

U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.

Paul’s free book Gold & Silver 2.0: Tales from the Crypto can be found in the usual places like Amazon, Apple iBooks & Google Play, or online at PaulEberhart.com. Paul’s Twitter is @Paul_Eberhart.