War in Israel may boost demand for gold, USD
The conflict in Israel may lead to increased geopolitical risks and encourage investors to move to traditionally safe assets such as gold and the US dollar
Reuters reported the information.
The situation in Israel is likely to prompt a shift to safe assets as investors closely monitor events in the Middle East to assess geopolitical risks to markets.
According to analysts, rising geopolitical risks could lead to buying of assets such as gold and the dollar, and potentially increase demand for US Treasuries, which have been actively sold off.
This is a good example of why people need gold in their portfolios. It is a perfect hedge against international turmoil," said Peter Cardillo, chief market economist at Spartan Capital Securities, who predicted that the dollar would rise in value.
"Anytime there is international turmoil, the dollar strengthens," Cardillo said.
Whether this is a massive market moment or not depends on how long it lasts and whether others are sucked into the conflict," said Brian Jacobsen, chief economist at Annex Wealth Management, of the situation in Israel. Jacobsen doubts how much it will affect the oil price, despite the fact that Iran is increasing oil production.
Events in Israel: latest updates
On the morning of Saturday, October 7, 2023, the Palestinian armed groups Hamas and Islamic Jihad launched a massive air and land attack on the state of Israel in several places. The head of the Hamas military wing, Mohammed Deif, said that his militants had launched the Al-Aqsa Flood operation. According to him, these actions are intended to protect the Al-Aqsa Mosque in Jerusalem.
The Palestinians launched 2,000 to 3,000 missiles at Israel and simultaneously seized 7 communities in the south.
In response, the Israeli Defense Forces (IDF) announced the mobilization of reservists and the launch of the Iron Swords counterterrorism operation. For the first time in 50 years, the government introduced martial law in the country.
The IDF actively used aviation to strike Palestinian command posts. It has also begun clearing Hamas-occupied communities.
In addition, there is a great threat that the Shiite Hezbollah could attack Israel from the north, as its main partner and supplier, the Islamic Republic of Iran (IRI), has called on jihadists to "liberate Jerusalem."
On the morning of October 8, the Saudi television channel Al Arabiya published the losses of both Palestinians and Israelis during the first day of the renewed military conflict. According to the channel, Israel lost 300 people killed and at least 1,600 wounded. The number of casualties from the Palestinian-populated Gaza Strip is 232 killed and 1,627 wounded.
On October 8, Israeli troops claimed that Lebanon had attacked their territory, so the Israeli Defense Forces (IDF) attacked in response. In particular, Israeli aviation struck a complex belonging to the head of Hamas' intelligence.
Militants of the Lebanese military-political organization Hezbollah fired at Israeli positions on the border with the disputed Golan Heights and supported Hamas in its operation against Israel.
Israeli Prime Minister Netanyahu has declared a state of war.
The Pentagon has characterized Palestine's actions in Israel as acts of violence and terrorism. They have also pledged to provide Israel with the necessary support to ensure its self-defense.