Key Takeaways

  • Geopolitical tensions drive the price of gold as the Israel-Hamas war rages on
  • Upcoming economic events likely to provide traders with essential insights

Gold Rush

Gold prices soared 3.4% on Friday before surrendering some of the gains Monday morning. Having climbed as high as $1,933/oz, the highest since September, the non-yielding asset kicked off this week currently trading at $1,911/oz.  Gold futures rocketed to $1,945 before receding back to $1,923. Altogether, the precious metal notched up impressive gains of 5.2% for the past week.  Revered as a “safe-haven” asset, gold reacted to the deteriorating situation between Hamas and Israel. The ongoing conflict between the two has sent investors in search of refuge, leading to a surge in the demand for gold.  Traditionally, gold is known as a hedge against inflation, as it usually moves inversely to the US dollar. Hotter-than-expected US CPI  (Consumer Price Index) September results last week also boosted the bullion as investors placed their bets against the Federal Reserve hiking their benchmark interest rate in their Oct. 31 – Nov. 1 meeting. 

The Bigger Picture

Looking at the broader scope of the market, the Dow Jones Industrial Average was the only major index to close out Friday’s session victorious, with 0.12% gains. The tech-heavy Nasdaq dropped 1.23%, with the S&P 500 following closely behind, posting a 0.5% loss. The economic calendar for this week may offer market participants more insights into US monetary policy, as Fed Chair Jerome Powell is due to speak in New York on Thursday on the current economic outlook.  To summarize, traders should keep tabs on the ongoing war between Israel and Hamas, as an escalating geopolitical situation could lead to a volatile market. Anticipate sudden changes and take meticulous action to avoid losses among your assets. Now might be the time to consider diversifying your portfolio in an effort to protect against potential losses, or to make use of risk management tools such as stop loss. With that in mind, check our resources to stay in the know. Preparedness is key to success.