By Orbex
US Kills Top Iranian General
The hostilities between the US and Iran have subsided for now. However, it would be foolish to deem the crisis as having “ended”.
The year began with President Trump ordering the assassination of a top Iranian general, Qassem Soleimani. This was the first time, since the start of World War II, that the US has ordered such an attack.
The killing sparked outrage in Iran. The country immediately threatened to take heavy revenge on the US for killing Soleimani, who was a war hero in Iran.
The world watched in horror over those days, fearing that retaliation by Iran would inevitably lead to war. Trump publicly threatened that should Iran retaliate, the US would respond with up to 52 airstrikes on key Iranian targets including Iranian cultural sites.
Iran Retaliates
Iran saw large state gatherings for Soleimani’s burial. And after days of heavily aggressive rhetoric from Iran, they did respond. The country launched a series of 22 ballistic missiles at US army bases in Iraq.
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The attack was met with horror as the world waited on the US response.
Trump Dials Back Tensions
Unexpectedly, Trump scaled back tensions by refraining from launching any physical retaliation. During an address to the nation, Trump announced further economic sanctions on Iran.
However, he said that, in light of intelligence reports suggesting that Iran was backing down from any further conflict, the US would not be responding at this stage.
Iran Admits Shooting Down Ukranian Airliner
Following a great deal of relief at having avoided further hostilities, things took a dark turn, however.
A Ukranian passenger jet flying into Iran was shot down, with all 176 passengers losing their lives.
The US immediately accused Iran of being behind the attack, which Iran initially denied. However, in the end, the Iranian military made the unprecedented move of admitting to the attack, live on TV.
The Iranians stated that the plane had been mistaken for a US missile, which it was trying to defend against.
Protests Begin in Iran
Over the weekend, protests erupted across Iran as the public reacted in outrage to the killing of Iranians by their own government. However, the protests themselves turned violent. Iranian security fired on the protesters.
The situation has seen a strong reversal in sentiment compared with the public gathering held around Soleimani’s death. Many protestors were seen ripping down posters and banners erected in Soleimani’s honor.
Trump Weighs in On Twitter
Commenting on Twitter, Trump wrote:
Risks Remain
The unexpected nature of recent developments in Iran shows just how fluid and fragile this situation is. And, as such, further aggression between the US and Iran cannot be ruled out.
The US and Iran pulled back from the brink of war last summer over Iranian attacks on oil ships in the Gulf region, followed by Iran shooting down a US drone.
The latest aggression came after months of calm and suggests that even if the US and Iran are not engaged in a full conflict currently, that is not to say this will remain so.
Technical Perspective
Gold prices continue to pull back from the 1608.54 level, with price having now broken back below the 1554.69 2019 highs. The correction is finding support into the lows, however, and, while above the 1522.75 level, a further push higher cannot be ruled out.
If price moves below the 1522.75 level, though, focus will shift to a test of the 1481.93 level next ahead of the broken bull flag pattern.
By Orbex
