On Monday (October 9th), in the early trading session of the Asian market, spot gold surged significantly, with gold prices rising by over $20 to a weekly high of $1855.25 per ounce. Currently, it is trading at $1848.08 per ounce. FXStreet analyst Dhwani Mehta recently wrote an article on Monday stating that the Middle East crisis has triggered investor safety and provided upward momentum for gold prices.
Mehta wrote that gold prices continued to rise on the basis of last Friday's rebound, returning to the $1850/ounce mark early Monday. After the opening of the trading session, gold prices hit a five day high of 1855.25 US dollars per ounce. The escalating geopolitical tensions in the Middle East spooked the market, and investors sought safety in traditional safe haven assets such as gold prices, the US dollar and US treasury bond bonds.
Mehta pointed out that after the unprecedented military attack on Israeli towns by the Hamas radical organization in the Palestinian Gaza Strip, geopolitical risks have once again become prominent. In response, Israel launched an air raid on Gaza on Sunday and declared war on Gaza.
On the morning of October 7th, the Palestinian Islamic Resistance Movement (Hamas) launched the largest rocket attack in recent years from the Gaza Strip on Israel, reportedly launching approximately 5000 rockets. According to the latest report by Bloomberg, the new round of conflict between Palestine and Israel has resulted in over 1100 deaths on both sides.
Israeli Prime Minister Netanyahu announced on October 7th local time, "Israeli citizens, we are in a state of war
Mehta stated that people are concerned that geopolitical conflicts may lead to another surge in oil prices, posing a threat to global inflation and economic prospects, leading to an increase in gold prices. As a response to the Middle East conflict, oil prices have surged by over 4%; This conflict may threaten the supply of oil prices.
However, Mehta cautioned that it seems uncertain whether gold prices can further rise, as the US dollar has also gained upward traction due to increased safe haven demand.
Mehta added that at the same time, Japan's holidays have also contributed to fluctuations in gold prices. Investors are now looking forward to the development of the Middle East situation, oil price trends, and upcoming US inflation data to seek new trading momentum.
At 09:41 Beijing time, spot gold was trading at $1848.82 per ounce.
