Gold prices surge as investors embrace safe haven assets following Hamas attack on Israel
Gold prices have rebounded heavily today from a nine-day slump, with investors drawn to safe haven assets amid concerns over geopolitical risk following Hamas’s attack on Israel.
The precious metal has spiked nearly $20 in today’s trading, rising from $1832.76 per ounce last night to $1850.10 per ounce, a more than nine per cent hike in Monday’s session.
Prices have rallied with investors seeking hard assets amid concerns of economic volatility and unpredictable behaviour in the market, after escalating conflict in Israel as hundreds of people were killed by Hamas militants in Sderot last Saturday.
This follows gold markets stabilising last week after a heavy decline, when challenging macroeconomic conditions caused commodity prices to drop with expectations of reduced demand and a robust US dollar.
Susannah Streeter, head of money and markets at Hargreaves Lansdown told City PM that prices could climb further.
She said: “As geopolitical risk takes centre stage, with these shocking attacks drawing international attention, money has flowed into safe haven assets, including gold. The price of the precious metal tends to rise in periods of heightened tension sparked by conflict and while worries of potential escalation percolate, the upwards pressure is likely to remain.”
Craig Erlam, senior market analyst at Oanda, argued that future price movements could depend on bond yields alongside the threat of further escalation in the Middle East.
He said: “Gold is higher at the start of the week, buoyed perhaps by some safe-haven flows against the backdrop of geopolitical uncertainty. The dollar is also stronger which is typically a headwind for gold but it’s not proving particularly problematic this morning.
“The yellow metal has been under immense pressure in recent weeks as investors became increasingly unsure about the inflation and interest rate environment and yields soared. That appears to have steadied for now but policymakers will have plenty of chance to calm nerves – or reinforce those concerns – this week.”