Gold futures gain $58 as safe-haven buying moves gold dramatically higher
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As of 3:55 PM EDT, gold futures basis the most active December contract is trading dramatically higher, up $58.50 and fixed at $1941.40. Today’s surge in gold pricing is the direct result of attraction by market participants to move a portion of their portfolio into a safe haven asset. This is the direct result of the current geopolitical conflict between Israel and Hamas which escalated tremendously today.
According to Reuters News, "Investors are fleeing to safe havens as the risks of Middle East tensions grow," said Edward Moya, senior market analyst at OANDA. "If the geopolitical situation gets gloomier, there is a good chance that gold prices could go to the $2,000 level this year. We have come from mid-$1,800s to mid-$1,900s, $2,000 is just a fraction of that."
The Reuters article also cited the escalation of the war between Israel and Hamas saying, “Israel said its infantry and tanks had carried out raids inside the Gaza Strip, its first announcement of a shift from an air war to ground operations to root out Hamas fighters a week after their deadly rampage in southern Israel.”
The conflict in the Middle East has taken center stage causing traders to shift their focus away from other financial influences. "The conflict and its implications have captured the world's attention and become the primary focus of media and public discourse, temporarily diverting attention from financial and economic matters." The managing director at SPI Asset Management, told MarketWatch, "The conflict and its implications have captured the world's attention and become the primary focus of media and public discourse, temporarily diverting attention from financial and economic matters."
Israel today ordered an evacuation of approximately 1 million Palestinians in Gaza according to Stephen Innes, "If Israel moves into Gaza with their modern-day military might, when considering the presence of hostile actors in the region and the fundamental nature of the conflict being rooted in religious differences, we could be on the cusp of something significant."
What began on Saturday as a brutal attack by the terrorist group Hamas killing hundreds of civilians including women and children led to Israel declaring war on the terrorist group Hamas. Since Saturday this conflict has intensified beyond anybody’s comprehension and as such stands a high probability that it will escalate to a much deeper and more violent war.
The National Review reported that “A top official in Hezbollah said the Iranian-backed Lebanese terrorist organization is “fully ready” to help Hamas fight against Israel, hinting of its future involvement in the ongoing war.”
The involvement of the Iranian-backed Hezbollah would take this conflict to an unthinkable level. Lastly, a former Hamas leader has called on Muslims across the world to take to the streets in support of Palestinians in Gaza calling for a "Day of Jihad" today. This has led U.S. authorities to increase their attentiveness over possible threats in the United States.
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Wishing you as always good trading,
