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Home » Gold Rates Rise on the Israel-Hamas war

Gold Rates Rise on the Israel-Hamas war


Gold is getting support from geopolitical concerns. As Reuters reported, “gold rose about 1.6 per cent on Monday, its biggest one-day jump in five months, as military clashes between Israel and Palestinian Islamist group Hamas boosted demand for safe-haven assets.”

Gold is often considered a safe-haven asset in times of geopolitical turmoil, economic uncertainty, or financial market instability.

Gold prices continued to rise on Tuesday, a day after posting sharp gains on increased market uncertainty due to conflict in the Middle East, as dovish remarks from top US Federal Reserve officials weighed on the dollar and bond yields, according to Reuters. Spot gold gained 0.1% to $1,862.80 per ounce, after earlier hitting its highest since Sept. 29. US gold futures climbed 0.7% to $1,876.90.

The Israel-Hamas war is expected to give a further boost to gold prices. Besides, gold prices react to interest rates. In the case of low-interest rates, the opportunity cost of holding gold is also lower, making gold more attractive. When interest rates go higher, they make other interest-bearing investments such as bonds more appealing.

In simple words, gold is an attractive safe-haven asset class during times of economic uncertainty, but it loses its appeal when interest rates rise as the yellow metal yields no interest.

Further more gold gains can expected.


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