Gold Investments Soar as 2023 Israel Hamas Conflict Escalates

The conflict between Israel and Hamas has been escalating in recent weeks, causing tensions to rise in the Middle East. As a result, many persons have turned to gold investments, since gold is the ultimate safe haven asset.

On October 7, 2023, a violent conflict erupted between Israel and Palestinian militants from the Gaza Strip. The conflict began when the militants launched a multi-pronged terrorist invasion of southern Israel, which was met with resistance from the Israeli military. After clearing Hamas militants, the Israeli military retaliated by conducting an extensive aerial bombardment campaign on Gazan targets, and followed up with a large-scale ground invasion of Gaza. The fighting has resulted in the loss of thousands of lives, with more than 1,200 Israelis and over 10,000 Palestinians killed. Additionally, over 240 Israelis and foreign nationals were taken hostage and brought into the Gaza Strip. The conflict has been ongoing for several weeks, with no clear end in sight.

The price of gold jumped about 11% between October 7th and the end of October 2023 as a result of the conflict.

Gold bounced back from a seven-month low as demand increased. The initial price move was also intensified as many investors who were betting on a further slide were caught off guard by the outbreak of war, forcing them to quickly cover their short holdings.

This new escalation of Middle East tensions has reinforced gold’s safe-haven status. As the tensions intensify, the demand for gold is expected to remain high and could reach much higher levels if the conflict broadens. If other countries such as Iran, Syria, Lebanon and the United States become involved, there is no telling how high the demand and price of gold could go.

Soaring Gold Investments

The Israel Hamas war has led to a surge in interest in gold investments. Gold prices have escalated amid the unrest. As the tensions escalate, the demand for gold is expected to remain high and could very well increase much further.

Amidst fears of a recession, which may force the Fed to cut interest rates, gold prices are already projected to reach all time USD highs by the end of next year. Some investment houses such as Livermore Partners and Wheaton Precious Metals, are already predicting spot prices as high as US$2500 per ounce in 2024.

Increased Central Bank Gold Purchases

Further substantiating the current high demand for gold investments, according to the latest report by the World Gold Council (WGC), central bank gold purchases totaled 337 metric tons in the third quarter, making it the second-largest third quarter on record. Year-to-date, central banks have added an impressive 800 tons of gold, which is 14% more than what they added during the same nine months last year.

China who is currently the largest producer of gold and does not export the commodity, notably continues to be the largest central bank purchaser of gold also. China purchased 78 metric tons of gold in the 3rd quarter of 2023.

Conclusion

The Israel Hamas war has exacerbated already dire geopolitical tensions caused by the war in Ukraine. This has lead to a surge in interest in gold investments. The demand for gold is expected to remain high as long as these conflicts persist.

Investing in a gold IRA can be a good option for those who want to diversify their retirement portfolio and protect their savings from inflation, market volatility and geopolitical risks. Gold has been regarded as a symbol of wealth and prosperity for centuries, and its ability to maintain its value even during times of economic uncertainty has made it an attractive investment option for many people.