Risk-off sentiments drive gold prices up as stocks worldwide slide amid Gaza onslaught
ALBAWABA – Stocks worldwide slipped on Friday while oil and gold prices surged over the weekend as the Israeli onslaught on Palestinians in Gaza continued, threatening to destabilize the entire region.
The markets’ appetite for risk seems to be receding as tensions rise in the central Mideast region, driving investments away from risk markets to safe-haven commodities.
Wall Street closed on a mixed bag of stocks, with the tech-rich Nasdaq declining 1.2 percent and the S&P 500 falling 0.5 percent, according to Agence France-Presse (AFP). But the Dow Jones Industrial Average rose 0.1 percent on positive earnings from JPMorgan and Wells Fargo, two of the US’ biggest banks.
Shares of JPMorgan and Wells Fargo earlier rose 1.5 percent and 3.1 percent, respectively.
The London, Frankfurt, Paris, Euro Stoxx, Tokyo, Hong Kong and Shanghai indexes were all down by Saturday evening, as reported by AFP.
Stocks worldwide down as gold prices surge as risk-off sentiments rise in equity markets - Shutterstock
Meanwhile, oil prices soared on fears that the imminent Israeli ground offensive on Gaza could turn into a regional conflict, disrupting supplies across the Middle East, the France-based news agency reported.
Oil prices rise on Mideast supply fears and gold prices surge on rising uncertainty
Brent futures settled $4.89, or 5.7 percent, higher at $90.89 per barrel, Reuters reported, and West Texas Intermediate (WTI) crude gained $4.78, or 5.8 percent, settling at $87.69 a barrel.
Both benchmarks posted their highest daily percentage gains since April. Brent also recorded a weekly gain of 7.5 percent, its biggest such increase since February, and WTI climbed 5.9 percent for the week.
Stocks worldwide slide as commodity, including oil, and gold prices rise in times of high risk and uncertainty - Shutterstock
Over the weekend, gold prices gained more than 3 percent, or $63.9 per ounce of spot gold, selling at $1,932.8 on Sunday, both Bloomberg and Reuters reported.
Gold prices are surging on risk-off sentiments in equity markets, mostly resulting from the intensifying conflict in Palestine and the Middle East.
United States (US) gold futures rose 3.1 percent higher on Friday, Reuters reported, settling at $1,941.5 per ounce, by 1908 GMT.
Overall, gold prices were up more than 5.2 percent for the week.
Commodities, gold prices rise amid fears of disruption across Mideast markets
In the meantime, zero-yield gold bullion got an additional boost from expectations that the US interest rates may have peaked, at least for now.
Spot silver climbed 4 percent to $22.72 per ounce, on track for its first weekly gain in three.
Gold prices have surged on rising uncertainty in the equity market worldwide - Shutterstock
Platinum rose 1.4 percent to $880.42, while palladium dropped 0.3 percent to $1,141.24 and was set for a weekly decline.
Investors, in risk-off market conditions, turn to safe havens like gold and treasury bonds with high yields. Higher interest rates mean even higher yields, which attracts investment away from equity markets.
Markets summary by AFP:
New York - Dow: UP 0.1 percent at 33,670.29 points (close)
New York - S&P: DOWN 0.5 percent at 4,327.78 (close)
New York - Nasdaq: DOWN 1.2 percent at 13,407.23 (close)
London - FTSE 100: DOWN 0.6 at 7,599.60 (close)
Frankfurt - DAX: DOWN 1.6 percent at 15,186.66 (close)
Paris - CAC 40: DOWN 1.4 percent at 7,003.53 (close)
EURO STOXX 50: DOWN 1.5 percent at 4,136.12 (close)
Tokyo - Nikkei 225: DOWN 0.6 percent at 32,315.99 (close)
Hong Kong - Hang Seng Index: DOWN 2.3 percent at 17,813.45 (close)
Shanghai - Composite: DOWN 0.6 percent at 3,088.10 (close)
Dollar/yen: DOWN at 149.53 yen from 149.79 yen on Thursday
Euro/dollar: DOWN at $1.0513 from $1.0534
Pound/dollar: DOWN at $1.2138 from $1.2177
Euro/pound: UP at 86.58 pence from 86.48 pence
