What Israel's War With Hamas Means For Gold And Other Safe Haven Assets

The unexpected attack on Israel by Hamas may spur a shift towards gold and other safe haven assets, suggesting a potential surge in market demand.

According to a report by Reuters on Saturday, the geopolitical tension emanating from Israel is perceived as a significant market risk. Western powers, with the United States at the helm, have condemned the attack and expressed support for Israel.

Analysts predict that the escalating geopolitical risk could fuel purchases of assets like gold, the dollar, and possibly U.S. Treasuries (NYSE: TLT), which have recently seen aggressive sell-offs.

Peter Cardillo, Spartan Capital Securities' chief market economist, underscored the importance of gold in investment portfolios, especially as a hedge against international crises. According to Reuters, he also anticipates that the dollar would benefit from such turmoil.

See Also: Biden Assures Support As Israel Faces Hamas Attack: 'The United States Unequivocally Condemns This ... Assault'

The markets have witnessed considerable volatility in recent weeks due to expectations of prolonged high U.S. interest rates. While bond yields and the dollar have experienced an uptick, stocks suffered significant losses in Q3, only stabilizing in the past week.

Brian Jacobsen, chief economist at Annex Wealth Management, emphasized the impact of the conflict's duration and its potential to draw other nations into the fray. He also questioned the extent of the conflict's influence on oil prices, despite Iran's increased output, Reuters noted.

David Kotok, Cumberland Advisors' chair and chief investment officer, expressed concerns to the outlet about the U.S.' ability to respond effectively, given the ongoing political instability in Washington.

The latest geopolitical developments and their potential impact on markets underscore the need for investors to stay informed and adjust their strategies accordingly.

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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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