Gold Reclaims $2,000 as Investors Seek Safe Haven Amid Gaza Invasion Fear
Investors Find Shelter in Gold as Gaza Invasion Looms
Gold bulls have finally regained their footing, with the price of gold surpassing the $2,000 per ounce mark. This comes after two months of elusive attempts to reach this milestone. The surge in gold prices is driven by investors seeking safe havens amidst growing concerns that Israel may execute a full ground invasion of Gaza to eradicate Hamas militants from Palestinian territory.
Gold Futures Show Post-Settlement Rally
Gold’s most-active contract on New York’s Comex, December, settled Friday’s trading session at $1,998.50 per ounce, recording a meager increase of $1.10 or 0.05%. However, in post-settlement trade, the benchmark gold futures contract experienced a slight uptick, reaching $2,017.85 at 15:35 US Eastern Time (19:35 Greenwich Mean Time), marking a 1.02% increase for the day.
Escalating Middle East Conflict Boosts Gold Demand
The post-settlement rally in gold can be attributed to the flurry of headlines surrounding the ongoing conflict in the Middle East. Despite intense mediation efforts by global powers, Israel and Hamas remain at an impasse. Hamas has conditioned the release of hostages in Gaza on a ceasefire in Israel’s bombardment of the Palestinian enclave. Meanwhile, Israel is contemplating a ground invasion. The uncertainty surrounding the situation has left traders on edge, racing from one headline to another.
Volatility Traders Rejoice Amidst Uncertainty
As the situation in the Middle East unfolds, traders across various markets are grappling with the chaos. John Kilduff, a partner at New York energy hedge fund Again Capital, aptly described the situation as a “mess.” The lack of clarity regarding the conflict’s trajectory has created a field day for volatility traders, who thrive in such uncertain conditions.
Gold Spot Price Eyes Further Upside
With spot gold successfully breaching the $1,998 resistance level and reaching $2,009, experts predict that the next major push could drive prices towards $2,050 and $2,075. Sunil Kumar Dixit, chief technical strategist at SKCharting.com, highlights that immediate support for spot gold also moves higher, residing in the $1,990-$1,980 zone.
Tensions Escalate as Iran Enters the Fray
While world powers attempt to mediate the conflict, Iran, a vocal supporter of Hamas, poses an additional threat. With each passing day of the three-week-old war, the risk of Iran, the fifth-largest oil producer globally, becoming involved intensifies. The recent U.S. military strike on Iranian targets in Syria has prompted warnings from Iranian Foreign Minister Hossein Amirabdollahian that the United States will not be spared from retaliation.
Regional Spillover Risks Emerge
The conflict’s repercussions are not confined to Gaza and Israel alone. On Friday, projectiles hit two Egyptian Red Sea towns, resulting in several injuries. This incident serves as a reminder of the potential for regional spillover from the ongoing conflict.
(Ambar Warrick contributed to this article)