Gold shines like never before! This Friday, October 18, its price exceeded the historic mark of $2,700, settling at $2,705 per ounce. This new summit is directly linked to the intensification of geopolitical tensions after Israel’s announcement of the death of Yahya Sinouar, leader of Hamas in Gaza.
A surge fueled by geopolitics
Since the start of the year, gold has gained nearly 30% in value, a spectacular increase. This performance is partly explained by the decision of central banks to lower interest rates, thus making gold, the safe haven par excellence, even more attractive for investors. But the triggering event for this new outbreak is undoubtedly the conflict shaking the Middle East.
Read our analysis: Gold (ounce in $) the yellow metal flies from record to record
With the war between Israel and Hamas in Gaza, and more recently the entry of Hezbollah into Lebanon, fears of a regional escalation involving Iran have skyrocketed. This climate of uncertainty encourages investors to turn massively towards safe assets, like gold.
A previous record exceeded
Before this increase, the previous record for the yellow metal had been set at $2,688.83 only the day before, Thursday October 17. This new crossing of 2,700 dollars reinforces the idea that gold is, more than ever, a safe bet in times of international instability.
A market shaken by conflicts
Financial markets are severely disrupted by the risks linked to the ongoing military escalation. Gold, often seen as a hedge against economic and geopolitical uncertainties, is being pushed to new heights. The volatility of stocks and fears of an extension of the conflict towards other regional powers make this scenario likely in the coming months.
The effect of central banks on the price of gold
Apart from conflicts, lowering of interest rates by central banks also plays a crucial role in the appreciation of gold. Indeed, such adjustments reduce the opportunity cost of holding gold, thus encouraging investors to strengthen their position in this precious metal.
With an increase of 30% since January, gold seems to be the big winner of this year 2024, a solid refuge from the economic and political storm which is currently hitting several regions of the world.
© AbcBourse.com. All rights reserved
Did you like this article? Share it with your friends using the buttons below.
