How Israel’s Conflict with Hamas Impacts Gold and other Safe Haven Assets.

Hamas’s surprise attack on Israel may lead to an increase in demand for safe haven assets like gold, suggesting a potential surge in the market. According to a Reuters report, the geopolitical tension stemming from Israel is seen as a significant market risk, with Western powers condemning the attack and supporting Israel. Analysts predict that the rising geopolitical risk could drive investors to purchase assets such as gold, the dollar, and potentially U.S. Treasuries, which have recently experienced significant sell-offs. Peter Cardillo, Chief Market Economist at Spartan Capital Securities, emphasized the importance of gold as a hedge against international crises and also anticipated that the dollar would benefit from the turmoil. The markets have witnessed volatility recently due to expectations of high U.S. interest rates, resulting in increased bond yields and a stronger dollar, while stocks experienced losses in Q3 before stabilizing in the past week. Brian Jacobsen, Chief Economist at Annex Wealth Management, highlighted the duration of the conflict and its potential to draw other nations into the situation. He also questioned the impact of the conflict on oil prices, even with Iran’s increased output. David Kotok, Chair and Chief Investment Officer at Cumberland Advisors, expressed concerns about the effectiveness of the U.S. response given the ongoing political instability in Washington. These geopolitical developments serve as a reminder for investors to stay informed and adjust their strategies accordingly.