Gold prices are trading significantly higher in the United States following the renewed outbreak of conflict between Israel and Palestine...
Gold prices are trading significantly higher in the United States following the renewed outbreak of conflict between Israel and Palestine, as more investors are looking for safe havens to protect from other unexpected major geopolitical shocks that could shake the global economy.
Israel has declared war on the pro-Palestinian Islamic fundamentalist terrorist group Hamas and other Palestinian militant groups in the Gaza Strip following a Hamas-led raid that saw hundreds of Israeli civilians killed and wounded and several Israeli settlements close to the Gaza Strip briefly occupied.
The outbreak of renewed large-scale conflict in the region and the possibility of more fighting in other parts of the Middle East caused Asian, European and American stocks alike to dip lower between Sunday, Oct. 8 to Tuesday, Oct. 10.
This major conflict in Israel and Palestine will likely in the coming months impact major economies around the world, including potentially affecting the central bank policies of major nations like the United States. There is even speculation that the conflict between Israel and Palestine may impact the U.S. House of Representatives' process of selecting a new Speaker of the House, likely in the direction of a pro-Israeli speaker who is willing to provide more funding for the Israeli Defense Forces.
Gold rises as investors flock to safety
As the conflict affects stocks and global economies, investors are looking for safe havens, or types of investments that are expected to either retain or increase in value during this time of heightened market turbulence. Putting more of their assets into safe havens could limit the risk of investors' losses in the event these global catastrophes cause market downturns. This is what gold is to many – and the precious metal's recent rally proves this.
Gold Continuous Contracts, one of the most actively traded gold futures contracts on the New York Mercantile Exchange, is up by more than 1.36 percent to $1,870.30 per troy ounce as of press time.
"Gold took the lead as investors flocked to safety," noted Raffi Boyadjian, lead investment analyst at finance company XM.
Spot gold prices in London also jumped by more than two percent compared to last week to a high of $1,866 per ounce.
Market analysts will now be waiting to see whether the conflict between Israel and Palestinians in the Gaza Strip spreads. There is concern that Hezbollah, an anti-Israeli group supported by Iran and operating mostly out of southern Lebanon, might also use the opportunity to conduct renewed strikes against Israel.
A report by the Wall Street Journal suggesting that Iran may have helped plan out Hamas' initial raid is also sparking fear that a war between Iran and Israel might begin. Israel's continued bombing of civilian housing and infrastructure in Gaza could also end up scuttling efforts to normalize relations between Israel and Saudi Arabia.
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