Metal rises almost 2%, supported by investors’ search for security amid Israel’s attacks
Gold is up almost 2% on Wednesday (18), supported by investors’ search for security amid attacks by Israel and terrorist groups on different targets in the Middle East. Fears of an escalation of the conflict into a full-scale war in the region are driving the market away from risky assets and benefiting the precious metal.
At 10:53 a.m. (Brasilia time), gold for December delivery traded on Comex, the metals division of the New York Mercantile Exchange (Nymex), was up 1.82% at US$ 1,971.00 per ounce.
The bombing of a hospital in Gaza, whose authorship is still uncertain, and Israel’s attack on a military base in Lebanon have increased tensions in the Middle East, where terrorist groups such as Hamas and Hezbollah are still responding with attacks on Israeli military infrastructure.
In this context, gold has found support and is approaching the $2,000 level, something it hasn’t done since last May. The uncertainties surrounding the conflict are even causing gold to rise in the face of a sharp increase in Treasury yields, which are testing their highest levels in more than a decade.
“Gold continues to benefit from its status as a ‘safe haven asset’ amid intensifying geopolitical uncertainty. The renewed pressure on conventional alternatives in the fixed income and real estate markets has further consolidated its strategic position in investment portfolios,” says Carlo Alberto De Casa, an analyst at Kinesis Money.
According to him, gold market flow has been “mixed”, with central bank demand intact, while exchange-traded fund (ETF) contracts have reduced exposure to the metal in both the US and Europe, with only Asia showing positive flow.