Surbiton Associates says that increasing tension between the US and Iran has led to an increase in the Australian dollar gold price which hit a record around $A2350 per ounce on Wednesday morning.

 

The record price resulted from a rise in the US dollar gold price to more than $US1610/oz and an Australian dollar which has fallen against the US dollar. 

 

"Gold once again proves it still retains its safe-haven status," Surbiton director Dr Sandra Close said.

 

On Wednesday Iran fired ballistic missiles at the Al Assad air base in Iraq's Anbar province and the Erbil base in northern Iraq, in reprisal for the death by a US drone strike of Qassem Soleimani, head of Iran's elite Quds Force.

 

"If you look at the factors that have pushed the gold price higher, tensions between Iran and the US go back many decades," Close said. "Remember, for example, the US hostages in Iran crisis which occurred 40 years ago, when Ronald Reagan was US president."

 

Increasing tension in the Middle East over oil supplies go back even further. In 1973 there was the first oil crisis, followed by the second oil crisis in late-1979 and early-1980. Both of these crises pushed the gold price higher and in some cases, to then record levels.

 

Close said that unexpected events such as these demonstrated the futility of trying to forecast gold prices.

 

Later in the week, as tensions dropped slightly, the price of gold eased.