The escalating conflict between the US and Israel with Iran poses difficult decisions for the gold market. At current prices, is gold a safe haven or a risky asset comparable to Bitcoin? All this is compounded by the decision of the American Federal Reserve.
Gold futures for April delivery rose 0.9% on Tuesday. up to $5,049 per ounce, and then dropped to $4,993, or 0.2 percent. compared to the last rate on Monday. Level 5k hole. once it is beaten up
Jim Wyckoff, senior analyst at Kitco Metals, told Reuters that the gold market is “a balancing act between demand for safe assetsdriven by increased geopolitical uncertainty, a downward pressure resulting from rising inflation“.
Well, on Wednesday around… At 7 p.m. we should know the decision of the committee setting interest rates in the US. Currently 99.1 percent investors in the Chicago Fed rate futures market are inclined to leave rates unchanged.
“The bulls simply ran out of fuel”
“I think gold will probably hit new records, but I suspect it won't happen any time soon. I think so the bulls simply ran out of fuel” Wyckoff said.
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Two weeks of conflict with Iran have significantly increased fuel prices in the world, the question is whether this conflict will last and how long will Iran resist the world's greatest military power?
Gold bars are considered a safe asset in times of uncertainty and inflation, but since they do not pay interest like bonds, they become less attractive in an environment of high interest rates. Then the market redirects interest to bonds. The yield on US 10-year notes has been falling in recent days, proving that this is where capital is moving.
“Iranian” inflation
Inflation is affected by the US and Israel's war with Iran, now in its third week, which has led to serious disruptions in oil and fuel trade. The blockade of the Strait of Hormuz and Iran's drone and missile attacks on oil and gas installations in the region are deepening the chaos.
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Israel announced on Tuesday that it had killed the head of Iran's security services, while a senior Iranian official said the new supreme leader rejected offers of de-escalation delivered through intermediaries, demanding that Israel and the United States be first “brought to their knees.”
This does not bode well for quick normalization. The situation may continue and have a negative impact on the world economy. Iran has a strong bargaining chip in the form of blackmail by blocking the Strait of Hormuz, and at the same time it destabilizes hydrocarbon production in the entire region with its attacks.
