Daily Management Review

Gold prices resume gains from seven-month low amid events in Israel


The price of gold started to grow following a seven-month low set last week due to the Israel's war with Hamas.

According to Bloomberg, gold prices have started to rise again after falling to a seven-month low last week as tensions between Israel and the Palestinian Hamas movement grew.

Gold is the classic safe-haven asset for investors. They typically sell gold when the yield on US government bonds rises and buy it when the situation is unclear. According to Bloomberg, as a result of the events in Israel, financial markets are getting ready for the appearance of fresh risk factors and volatility.

According to analyst David Lennox of the research firm Fat Prophets, the Israeli situation has so far only marginally increased the value of gold; a far more serious escalation in the region might cause a stronger price increase. Even before Israel and Hamas started fighting, the price of gold started to grow on the stock market due to demand sparked by U.S. Federal Reserve hints that it would not be lowering the prime rate, Bloomberg notes.

source: bloomberg.com