{"id":3452,"date":"2023-10-20T01:17:13","date_gmt":"2023-10-20T01:17:13","guid":{"rendered":"https:\/\/infundpros.com\/investment\/what-israel-hamas-war-means-for-gold-as-investors-seek-safety\/"},"modified":"2023-10-20T01:17:14","modified_gmt":"2023-10-20T01:17:14","slug":"what-israel-hamas-war-means-for-gold-as-investors-seek-safety","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=3452","title":{"rendered":"What Israel-Hamas war means for gold as investors seek safety"},"content":{"rendered":"
\n

Gold has climbed close to $100 an ounce since Hamas attacked Israel more than week ago, but investors shouldn\u2019t expect to see a straight shot higher for prices, even as geopolitical turmoil tends to lift demand for so-called safer investments.<\/p>\n

\u201cInvestors are fleeing to safe-haven assets during times of geopolitical uncertainty,\u201d said Rania Gule, market analyst at XS.com, in market commentary on Monday. Gold is considered one of these safe assets during \u201cturbulent periods.\u201d<\/p>\n

\n

Hamas, the Palestinian militant group that controls the Gaza Strip, launched a surprise attack on Israel on Oct. 7. Israel declared war against Hamas and retaliatory strikes by Israel on Gaza followed. <\/p>\n

As the conflict in Palestine escalated last week, market demand \u201cshifted from riskier assets to safe-haven plays,\u201d said Gule. <\/p>\n

Gold futures have climbed by nearly $100 an ounce, or 4.8%, since their settlement at $1,845.20 on Oct. 6, just ahead of the Oct. 7 Hamas attack on Israel. Prices for the precious metal rose by more than 3% on Friday alone.<\/p>\n

\u201cNo one wanted to be out of the gold market going into the weekend. It was a classic safe-haven event,\u201d wrote Brien Lundin, editor of Gold Newsletter, in a note sent to subscribers on Saturday. So the situation is \u201cbad news for the world and, in a typical bittersweet fashion, good news for gold bulls.\u201d<\/p>\n

Gold \u2018relies on no one\u2019<\/h2>\n

The rise in gold prices so far is \u201csignificant\u201d and is a \u201creflection of short-term confidence in the markets,\u201d David Russell, chief executive officer of GoldCore, told MarketWatch. Still, this is may be \u201cjust a small indication of how it is set to perform\u00a0in the coming months.\u201d<\/p>\n

So far, the Israel-Hamas conflict has been mostly supportive for gold.<\/p>\n

\u201cGold reacts well on the back of uncertainty, and this is a very uncertain situation,\u201d said Russell. <\/p>\n

<\/p>\n

<\/p>\n

\n

\n \u201c<\/span> \u201cGold reacts well on the back of uncertainty, and this is a very uncertain situation.\u201d \u201d<\/span>\n <\/p>\n


\n \u2014 David Russell, GoldCore<\/span>
\n <\/small><\/p><\/div>\n<\/p><\/div>\n

\u201cAny war requires funding and that comes from printing money,\u201d he said. \u201cThis is inflationary and therefore positive for gold.\u201d <\/p>\n

Read:<\/strong> Israel-Gaza conflict threatens to reawaken U.S. inflation, investors worry<\/p>\n

Short-term, Russell said gold traders will always\u00a0look to the likes of U.S. dollar strength and U.S. Treasury yields, but physical gold buyers recognize that instability\u00a0in the Middle East will \u201cnot be resolved swiftly or easily and so long-term this is going to be a very uncertain time ahead.\u201d Gold is a \u201ccertain asset as it relies on no one, and that\u2019s why it will do well against this backdrop.\u201d<\/p>\n

Price pullback<\/h2>\n

Still, fresh record highs appear to be out of the question, despite the recent boost for gold.<\/p>\n

On Monday, the most-active December gold contract
\n GC00,
\n +0.24%<\/bg-quote><\/p>\n

GCZ23,
\n +0.24%<\/bg-quote>
\n settled $7.20, or 0.4%, lower at $1,934.30 an ounce on Comex after posting a more than 5% weekly rise.<\/p>\n

The precious metal isn\u2019t likely to see prices climb above $2,000 an ounce for an extended period, or surge to new all-time highs in the short term, said Matthew Miller, senior equity analyst at CFRA Research.<\/p>\n

Strength in the U.S. dollar and rising real yields provide investors with \u201ccompelling options for safe-haven assets,\u201d he said. The real yield on the 10-year Treasury has moved from negative 1% in March 2022 to positive 2.4% currently, which \u201cincreases the opportunity cost of holding a non-interest-bearing security, such as precious metals.\u201d<\/p>\n

He said CFRA expects gold to be \u201crangebound\u201d between $1,800 and $2,000 until the market enters the next phase of interest-rate policy \u2014 when the Fed starts cutting rates again. That\u2019s when gold should \u201cexperience a new bull market.\u201d<\/p>\n

Risks<\/h2>\n

Gold Newsletter\u2019s Lundin, meanwhile, warned of risks ahead for gold. <\/p>\n

\u201cAs experienced investors in the sector know well, gold typically spikes on these kinds of geopolitical events, only to fall right back down (or lower) once things calm down,\u201d he wrote in Monday\u2019s note. <\/p>\n

However, Lundin told MarketWatch late last week that this geopolitical event may hit the market a bit differently.<\/p>\n

The Federal Reserve\u2019s interest rate-hike cycle is \u201ceither peaking or has already peaked,\u201d with Fed Chairman Jerome Powell and company likely \u201chappy to have an excuse to lay off further hikes, or even pivot. And this crisis in the Mideast, which is very likely to escalate and expand, could be just the excuse they need.\u201d<\/p>\n

So \u201cif this geopolitical event forces a shift in monetary policy, it will provide the fuel to take this rally in the metals far, far higher,\u201d said Lundin.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Gold has climbed close to $100 an ounce since Hamas attacked Israel more than week ago, but investors shouldn\u2019t expect to see…<\/p>\n","protected":false},"author":1,"featured_media":3453,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[],"class_list":{"0":"post-3452","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investment"},"yoast_head":"\nWhat Israel-Hamas war means for gold as investors seek safety | inFundPros<\/title>\n<meta name=\"description\" content=\"Gold has climbed close to $100 an ounce since Hamas attacked Israel more than week ago, but investors shouldn\u2019t expect to see a straight shot higher for\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=3452\" \/>\n<meta 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