Theconflict may continue to impact the gold market fundamentally
Since the beginning of the Israel-Palestine conflict, the market has been closely monitoring the situation. Reports suggest that Israel has the financial capacity and GDP to sustain a prolonged conflict of up to eight weeks. Bob Savage, Head of Market Strategy and Insights at BNY Mellon, has warned that "what global markets have not fully priced in is the inflation risk stemming from rising oil prices and increased defense spending."
Any escalation in the conflict, including war expansion, could trigger disruptions in oil supply and further demand for safe-haven assets such as gold, the US dollar, and the Swiss franc.
While the outcome of the current conflict remains uncertain, the market needs to be prepared for an escalation, whether in terms of hedging or other aspects. Hedging, in this case, involves investors flocking to bonds and gold while selling stocks.
Regarding gold performance, on Wednesday, the spot gold price remained at a relatively high level, rising from the opening price of $1,859 to a peak of $1,877. As the US CPI data is set to be released on Thursday, it is expected to decrease from 3.7% to 3.6%. If it exceeds expectations, it could raise concerns about inflation in the market, potentially pushing up the US dollar and limiting the short-term price potential of gold. Therefore, the current challenge for gold bulls is the concern about inflation in the United States and globally.
Any escalation in the conflict, including war expansion, could trigger disruptions in oil supply and further demand for safe-haven assets such as gold, the US dollar, and the Swiss franc.
While the outcome of the current conflict remains uncertain, the market needs to be prepared for an escalation, whether in terms of hedging or other aspects. Hedging, in this case, involves investors flocking to bonds and gold while selling stocks.
Regarding gold performance, on Wednesday, the spot gold price remained at a relatively high level, rising from the opening price of $1,859 to a peak of $1,877. As the US CPI data is set to be released on Thursday, it is expected to decrease from 3.7% to 3.6%. If it exceeds expectations, it could raise concerns about inflation in the market, potentially pushing up the US dollar and limiting the short-term price potential of gold. Therefore, the current challenge for gold bulls is the concern about inflation in the United States and globally.