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Gold Price - Where is it heading?
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Sean K
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Russia invaded on 24 Feb 22 when gold was $1780. Gold then peaked on 7 March at $2060. A $280 gain. Not sure if this is as significant, unless Hezbollah join in or Iran do something nuts.
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this conflict could go anywhere , Egypt for one might carry some unpleasant memories
if Syria gets dragged in who will Russia support ?
and what about Turkey it will have conflicts with loyalties
and IF the Hamas weapons were abandoned in Afghanistan as some allege , what else did Hamas accumulate
and of course this little ruckus could destroy the UN , Israel has been doing what it damn well pleases for decades despite numerous UN resolutions
oh if Iran gets dragged into this what do two powerful Iraqi factions do ( the Merdi Army and Histani faction ) and of course there is Lebanon
if Syria gets dragged in who will Russia support ?
and what about Turkey it will have conflicts with loyalties
and IF the Hamas weapons were abandoned in Afghanistan as some allege , what else did Hamas accumulate
and of course this little ruckus could destroy the UN , Israel has been doing what it damn well pleases for decades despite numerous UN resolutions
oh if Iran gets dragged into this what do two powerful Iraqi factions do ( the Merdi Army and Histani faction ) and of course there is Lebanon
Sean K
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Yes, what happens next? Russia's always been with the Arabs.
Lidia Thorpe "stands with Palestine" as well, so the World's in deep poo.
For gold, a short term sugar hit until we know where this is likely to go or not go.
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but Russia ( in the post Soviet era ) has maintained good relations will Israel as well
now since some of Pakistan has come out to back Hamas , what about Indonesia ( i suspect they would rather stay neutral )
curve-ball would be South Africa , formerly had very good relations with Israel , but now is firmly aligned with BRICS so am guessing they would rather stay neutral
and don't forget gold is still a Tier 1 asset under Basel III , so banks big , small and Central will have some incentives to stock-pile gold
the BIG danger is a ( near ) global liquidation event in a world of staggering amounts of debt
The price of gold is closely correlated with the US long-term real yield (return of long-dated US government bonds less the inflation rate). The US Federal Reserve and the markets trade gold to correspond to the US long-term real yield, which measures the extent in which the US dollar can deliver returns exceeding inflation. They move in opposite directions.
Currently, it’s at 2.6% which is a level not seen since 2009.
Just two years ago, the long-term real yield was still negative. That’s why gold was trading at its all-time record. As the real yield rose sharply in the past year gold fell, because the US Federal Reserve aggressively raised the Federal Funds Rate to fight inflation.
The last time the Federal Reserve was able to control inflation and revived the long-term real yield was in 2013. That caused gold to plunge from US$1,700 to as low as US$1,045 in late-2015.
This time, gold only dropped from around US$2,000 to US$1,600. This is despite the real yield rising more than it did in 2013–15.
That’s a good sign. Gold is clearly more resilient this time to central bank monetary policy.
Currently, it’s at 2.6% which is a level not seen since 2009.
Just two years ago, the long-term real yield was still negative. That’s why gold was trading at its all-time record. As the real yield rose sharply in the past year gold fell, because the US Federal Reserve aggressively raised the Federal Funds Rate to fight inflation.
The last time the Federal Reserve was able to control inflation and revived the long-term real yield was in 2013. That caused gold to plunge from US$1,700 to as low as US$1,045 in late-2015.
This time, gold only dropped from around US$2,000 to US$1,600. This is despite the real yield rising more than it did in 2013–15.
That’s a good sign. Gold is clearly more resilient this time to central bank monetary policy.
Sean K
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Up $50 so far, $230 to go?
Start of the ground invasion will add some fuel. A second CSG moving close to the Gulf might add some lighter fluid. There's currently an ARG in the Gulf waiting to do something. Not sure why a 'coast guard' is on the other side of the planet...
USS Bataan (LHD-5) and USS Carter Hall (LSD-50), with elements of the 26th Marine Expeditionary Unit embarked, are now in the Persian Gulf.
The ships’ arrival in the region earlier this year is the first time an Amphibious Ready Group has been in U.S. 5th Fleet since the Essex Amphibious Ready Group departed in January 2022.
Embarked units include Amphibious Squadron 8, 26th MEU(SOC), Fleet Surgical Team 8, Tactical Air Control Squadron 21, Helicopter Sea Combat Squadron 26, Assault Craft Unit 2, Assault Craft Unit 4 and Beach Master Unit 2. The 26th MEU (SOC), based at Camp Lejeune, N.C., includes Battalion Landing Team 1st Battalion, 6th Marines; Marine Medium Tiltrotor Squadron 162 (Reinforced) and Combat Logistics Battalion 22.
U.S. Coast Guard Sentinel-class Fast Response Cutters (FRCs) are forward-deployed to the region under Patrol Forces Southwest Asia (PATFORSWA). PATFORSWA deploys Coast Guard personnel and ships with U.S. and regional naval forces throughout the Middle East. Initially deployed in 2003 to support Operation Iraqi Freedom, PATFORSWA is now a permanent presence based out of the Kingdom of Bahrain.
Start of the ground invasion will add some fuel. A second CSG moving close to the Gulf might add some lighter fluid. There's currently an ARG in the Gulf waiting to do something. Not sure why a 'coast guard' is on the other side of the planet...
USS Bataan (LHD-5) and USS Carter Hall (LSD-50), with elements of the 26th Marine Expeditionary Unit embarked, are now in the Persian Gulf.
The ships’ arrival in the region earlier this year is the first time an Amphibious Ready Group has been in U.S. 5th Fleet since the Essex Amphibious Ready Group departed in January 2022.
Embarked units include Amphibious Squadron 8, 26th MEU(SOC), Fleet Surgical Team 8, Tactical Air Control Squadron 21, Helicopter Sea Combat Squadron 26, Assault Craft Unit 2, Assault Craft Unit 4 and Beach Master Unit 2. The 26th MEU (SOC), based at Camp Lejeune, N.C., includes Battalion Landing Team 1st Battalion, 6th Marines; Marine Medium Tiltrotor Squadron 162 (Reinforced) and Combat Logistics Battalion 22.
U.S. Coast Guard Sentinel-class Fast Response Cutters (FRCs) are forward-deployed to the region under Patrol Forces Southwest Asia (PATFORSWA). PATFORSWA deploys Coast Guard personnel and ships with U.S. and regional naval forces throughout the Middle East. Initially deployed in 2003 to support Operation Iraqi Freedom, PATFORSWA is now a permanent presence based out of the Kingdom of Bahrain.
Sean K
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Lesson to self, buy something related to gold at the start of geopolitical crisis. It lasts for a few days. I'd like to see an analysis on this. A lot of TAs will say it's all in the charts but there seems to be news driven responses too. Will be interesting to see how far this one goes.
Sean K
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Watching Lloyd Austin speak and the price of gold has gone north.
Gone north alright gold currently US$1,924 / AUD$3,022
Sean K
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Up $110 since the Hamas attack. The Hawkishness of the US in being determined to support Israel is probably helping. As they’ve got about 20 citizens being held hostage I’m surprised SF isn’t already in there. Maybe they are.
Sean K
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I somehow doubt the US could do better than the Israelis there
Sean K
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Yeah, plus overt US direct involvement would probably escalate it. They're probably assisting with planning and intel though.
Looks like gold is going to ride this for a while. Maybe until we know it's not going to spread wider.
In there lies the chance/risk of this conflict escalating/spreading across the Middle East.. perhaps Arab nations siding with the Palestinians as most already hate the West as it is and will Russia indirectly support these Arab nations if this escalates into a full blown war !? unfortunately can't see any peaceful resolution anytime soon imo though really hope/pray for peace
Sean K
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This should probably put about 1-2% on gold on Monday, unless this was the reason for the jump on Friday.
Two CSGs in the Med and an ARG in the Gulf.
The presence of the USS Eisenhower and its affiliated warships in the eastern Mediterranean signals Washington’s “iron-clad commitment to Israel’s security and our resolve to deter any state or non-state actor seeking to escalate this war,” Defence Secretary Lloyd Austin said.
The Eisenhower joins the USS Gerald R. Ford carrier strike group “as part of our effort to deter hostile actions against Israel or any efforts toward widening this war”, Mr Austin said.
The show of support came as Israel appeared poised for a ground offensive against Hamas militants in Gaza.
More than one million people in the northern part of the crowded enclave have been ordered to flee ahead of the expected assault, an exodus that aid groups said would set off a humanitarian disaster.
Israel has also cut off food, water and electricity to Gaza’s 2.4 million people.
Mr Biden spoke by phone on Saturday with Israeli Prime Minister Benjamin Netanyahu and “affirmed his support for all efforts to protect civilians”, the White House said in a statement, which did not specifically mention Gaza.
“President Biden discussed with Prime Minister Netanyahu US co-ordination with the United Nations, Egypt, Jordan, Israel and others in the region to ensure innocent civilians have access to water, food and medical care,” the White House said.
Two CSGs in the Med and an ARG in the Gulf.
The presence of the USS Eisenhower and its affiliated warships in the eastern Mediterranean signals Washington’s “iron-clad commitment to Israel’s security and our resolve to deter any state or non-state actor seeking to escalate this war,” Defence Secretary Lloyd Austin said.
The Eisenhower joins the USS Gerald R. Ford carrier strike group “as part of our effort to deter hostile actions against Israel or any efforts toward widening this war”, Mr Austin said.
The show of support came as Israel appeared poised for a ground offensive against Hamas militants in Gaza.
More than one million people in the northern part of the crowded enclave have been ordered to flee ahead of the expected assault, an exodus that aid groups said would set off a humanitarian disaster.
Israel has also cut off food, water and electricity to Gaza’s 2.4 million people.
Mr Biden spoke by phone on Saturday with Israeli Prime Minister Benjamin Netanyahu and “affirmed his support for all efforts to protect civilians”, the White House said in a statement, which did not specifically mention Gaza.
“President Biden discussed with Prime Minister Netanyahu US co-ordination with the United Nations, Egypt, Jordan, Israel and others in the region to ensure innocent civilians have access to water, food and medical care,” the White House said.
greggles
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This conflict could easily spread and Syria, Iran and Lebanon could become involved. I'm not big on conspiracies but I think it is entirely plausible that Putin could have provoked this via Iran who Russia has become close to since the war In Ukraine started. Apparently Iran is closely connected to HAMAS and the timing of this most recent attack in Israel could be a strategy to take the world's attention away from Ukraine. If so, it is working.
The middle east is a powder keg of religion and extremism. This could easily blow up into something much bigger, and if it does oil and precious metals will see significant price increases.
The middle east is a powder keg of religion and extremism. This could easily blow up into something much bigger, and if it does oil and precious metals will see significant price increases.
Apparently Iranian leader Ali Khemenai showing/giving his support to Hamas - I think "sh*t is about to hit the fan" big time
