Investors seek harbour in gold as US and Israel strike Iran

Author: Anmol Choubey and Anushree Mukherjee

March 1 (Reuters) – U.S. and Israeli attacks on Iran have heightened uncertainty in global markets, with investors keeping a close eye on potential safe-haven inflows into gold. Here are some reactions from investors, traders and analysts:

Edward Meir, MAREX Analyst

“I think there will be a knee-jerk rally in most commodity markets, including gold and oil. It will be a natural response to an outbreak of hostilities, the scale and scope of which was unexpected.”

“I think gold prices could rise around $200 an ounce but then move lower throughout the day. Markets are pretty calm when it comes to military conflict; the only issue investors ultimately focus on is whether the flow of oil will be disrupted, so the initial rise tends to subside once the initial surge is over.”

INPROVED Precious Metals Trader HUGO PASCAL

“Tokenized gold is currently trading at higher prices due to traditional exchange closures, suggesting a bullish ‘flight to safety’ signal ahead of the week’s open. Our digital agents are showing strong weekend buying.”

“PAX Gold (PAXG) currently leads the way at $5,344/oz (+2.2% since Friday), while Tether Gold (XAUt) climbed to $5,292/oz (+1.2%).”

However, “the agency premium for that weekend often exaggerates the initial gap but accurately reflects the direction.” TIM Waterer, Chief Market Analyst, KCM TRADE

“Demand for gold is likely to be higher than usual when markets open on Monday. Gold is expected to assume the role of a safe-haven asset given how long the conflict is likely to last, the risk that other countries may be drawn in, and inflation concerns.”

“The stock market and other risk assets are likely to sell off and investors will be looking for the best places to park their money, and gold is likely to be at the top of the list.”

FAWAD RAZAQZADA, Market Analyst, City Index and FOREX.COM

“Safe-haven demand for gold will increase and gold prices may rise again to around $5,500 and possibly hit new highs from the January peak of around $5,600.”

“However, gold’s gains above this level may be limited by a potential rebound in the U.S. dollar, especially if crude oil moves significantly higher.”

TAI WONG, Independent Metals Trader “I think gold and silver may ‘de facto’ sell off in public, but any significant sell-off will find buyers as the situation with Iran is unlikely to be clear for weeks to months.”

“I think the U.S. attack has been priced in, but the timing is a little bit uncertain. That’s definitely in the oil market. And the fact that cryptocurrencies are moving higher could be a sign.”

ANZ Bank Analyst SONI KUMARI

“Tomorrow, the initial price reaction will be positive, although there could be some pullback later depending on how things unfold.”

“Our overall view has not changed and we remain bullish on gold… Geopolitics have changed a lot this year, tensions have intensified, and there could also be macro implications following this attack, especially if oil prices rise significantly.”

JOSHUA ROTBART, Founder and Managing Partner of J. ROTBART & CO

“What is certain is that precious metals will experience greater volatility as they move higher.”

“With the risk of war with Iran already priced in to some extent in higher gold prices, the extent of the move will depend on the impact of the conflict on energy markets and whether regime change in Iran is within reach.”

OLE ​HANSEN, Head of Commodity Strategy, Saxo Bank

“There’s no doubt this is a concerning escalation that will push investors into precious metals and energy. How big the impact will be is anyone’s guess, but given last week’s momentum, I wouldn’t be surprised if gold prices hit new all-time highs.”

(Reporting by Anmol Choubey and Anushree Mukherjee in Bengaluru; Editing by Alison Williams)