menu-control
The Jerusalem Post
The Jerusalem Post: Business and Innovation

Gold prices stay flat amid Lebanon operation, Iranian ballistic missile attack

 
 Gold prices stay flat amid Lebanon operation, Iranian ballistic missile attack (photo credit: PR)
Gold prices stay flat amid Lebanon operation, Iranian ballistic missile attack
(photo credit: PR)

Despite geopolitical tensions rising massively on Tuesday as Israel performs a ground operation in Lebanon and Iran responds with ballistic missile attack, gold is trading lower.

The precious metals markets were trading slightly lower the day after Israel began a ground operation in Lebanon and Iran responded with a barrage of 180 ballistic missiles that failed to kill any Israelis. One Palestinian civilian was killed in the West Bank, according to the Israeli Defense Force.

Gold traded around the $2,650 an ounce mark, down about $9, while silver remained relatively flat at $31.46.

 Gold prices traded slightly stronger Tuesday, but showed weakness at the beginning of U.S. trading Wednesday. (Source: TradingView) (credit: PR)
Gold prices traded slightly stronger Tuesday, but showed weakness at the beginning of U.S. trading Wednesday. (Source: TradingView) (credit: PR)

Blue Line Futures Chief Market Strategist Phil Streible said he believes gold’s relatively small move upward amid the massive rise in tensions could be due to a strengthening U.S. dollar in reaction to the events.

The dollar-gold correlation amid tensions

Streible noted the Euro’s weakening in response to Tuesday’s increase in violence.

“The Euro currency did sell off aggressively and the dollar index caught that bid,” he said. “And I think that’s what put the cap on the gold market.”

 The Dollar Index has shown strength in recent trading. (Source: TradingView)  (credit: PR)
The Dollar Index has shown strength in recent trading. (Source: TradingView) (credit: PR)

Gold prices are often inversely correlated to the dollar as most commodities tend to be, however, Streible noted there are certain times when both the currency and yellow metal can appear to be a safe haven to investors, and Tuesday was likely one of those days.

“December gold is (now) down to $2,672 and that could present some opportunities to enter into that trade,” he said.

Featured Partners (Ad)

Request Your Free Gold Investment Educational Kit

Inflation talk is starting again

After a blockbuster Federal Reserve meeting that ended with a cut of 50 basis points, Streible said a recent strike of 50,000 port workers from Maine to Texas could result in rising commodities prices.

“Remember, if you have these problems where we’re not able to bring in additional materials, the commodities located in the U.S. or closely abroad should go up in price,” he explained. “What does that do? It pushes inflation upward. What’s that do? That pushes fed expectations for larger interest rate cuts down.”

 Gold prices are often inversely correlated to the dollar as most commodities tend to be, however, Streible noted there are certain times when both the currency and yellow metal can appear to be a safe haven to investors, and Tuesday was likely one of those days. “December gold is (now) down to $2,6 (credit: PR)
Gold prices are often inversely correlated to the dollar as most commodities tend to be, however, Streible noted there are certain times when both the currency and yellow metal can appear to be a safe haven to investors, and Tuesday was likely one of those days. “December gold is (now) down to $2,6 (credit: PR)

According to the most recent update of the CME FedWatch tool, traders are pricing in a 65% chance of a 25 basis point cut and a 35% chance of a 50 basis point cut at the upcoming FOMC meeting on Nov. 7. Just one week ago, traders were chancing in a 57% chance of the larger interest rate cut.

“Gold futures need more accelerated interest rate cuts,” Streible said. “We need to see a deeper cut down to the terminal rate. Does (what’s happening with the port strike) raise the terminal rate?”

Featured Partners (Ad)

Augusta Precious Metals

Fees:

$0 (10 Years)

Minimum:

$50,000

"Best Overall" by Money Magazine, Award-Winning for 6 Years, Thousands of 5-Star Rankings

Expand DetailsRenowned for its exceptional customer service and commitment to transparency, Augusta Precious Metals has garnered numerous accolades, including "Best Overall" from Money magazine and "Most Transparent" from Investopedia. The company's dedication to educating and supporting its clients has earned it top ratings from organizations such as A+ from BBB and AAA from BCA.

Goldco

Fees:

Vary

Minimum:

$25,000

Industry leader with over $2 Billion in gold and silver. Top rated precious metals company with buy back guarantee

Expand DetailsFrom precious metals iras to direct purchases of gold and silver, goldco have helped thousands of americans place over $2 billion in gold and silver. Top-rated precious metals company rated A+ by the better business bureau rated triple a by business consumer alliance earned over 6,000+ 5-star customer ratings Money.Com 2024 best customer service 2024 inc. 5000 regionals: pacific ranked #17 2024 gold stevie award, fastest growing company inc. 5000 award recipient, 8+ years

American Hartford Gold

Fees:

Vary

Minimum:

$10,000

American Hartford Gold, ranked #1 Gold Company on Inc. 5000, boasts thousands of A+ BBB ratings and 5-star reviews, endorsed by Bill O'Reilly and Rick Harrison..

Expand DetailsWith over $2 billion in precious metals sold, American Hartford Gold helps individuals and families diversify and protect their wealth. Their expert team provides investors with the latest market insights and a historical perspective, ensuring informed decisions. Trusted by public figures and praised for exceptional customer service, the company offers competitive pricing on top-tier gold and silver coins, backed by a 100% customer satisfaction guarantee

This article is for informational purposes only. The opinions and analysis herein are those of the author and are not financial advice. The Jerusalem Post (JPost.com) does not endorse or recommend any investments based on this information. Investors should consider their financial situation, investment goals, and risk tolerance before making any decisions. Consulting a qualified financial advisor is recommended. JPost.com is not liable for any investment losses from using this information. The information provided is for educational purposes only and should not be considered as trading or investment advice.

×
Email:
×
Email: