ALBAWABA – Fears that the onslaught on Gaza would spiral into a regional war have bolstered demand for safe haven investments, driving gold prices beyond the $2,000 threshold over the weekend.
Gold prices hit $2,006.33 on the ounce on Sunday, rising $21.86, or 1.10 percent, according to GoldPrice.org, closing on its highest levels reported three years ago.
Notably, this is the first time gold has breached the 2k barrier since May, despite the rise in bond yields, signalling a rising aversion to risk.
By Friday, spot gold had gained as much as 1.2 percent, putting the precious metal on course for the biggest monthly gain since July 2020, according to Bloomberg.
Gold prices touched an all-time high of $2,075.47 in 2020.
The rally in gold prices was triggered by a statement from the Israeli military saying they were “expanding ground activity” in Gaza, the New York-based news agency reported.
Bullion has jumped about 9 percent since Hamas launched the surprise Gaza attack on October 7, bouncing back from a seven-month low as demand for haven assets increased.
Israeli occupation forces announced expanding land invasion operation amid onslaught on Gaza, driving up gold prices - AFP
Over the month, gold prices gained $117.74 on the ounce, marking a 6.31 percent increase.
Meanwhile, action cooled in other markets, including equities, as investors pulled out after having seen the worst October in five years, as the US dollar slipped on higher oil prices.
A Bloomberg survey showed Friday that many investors have cut their equities to levels last seen at the depths of the 2022 bear market, while hedge funds pushed up single-stock shorts for an 11th straight week.
Meanwhile, the drop in the earnings of multiple major tech companies on Wall Street also fuelled fears of a broader fall in equities, with the Dow, NASDAQ and S&P 500 mostly sliding over the last couple of weeks.
Despite worldwide efforts to de-escalate the situation in Palestine, and Gaza in particular, concerns are still mounting over fears that the conflict will spill to other countries in the region. Especially as Israeli occupation forces stepped up land invasion efforts.
Combined with disappointing financial results in major markets in Asia and the United States, fear that a war in the Middle East would disrupt market supplies drove money out of stocks and into safe havens.
