Gold prices continue to hold above a crucial support level, with the yellow metal trading around £1,600. However, we could see this figure leap upon safe- haven demand as the situation in the Middle East has continued to deteriorate this week.
Within the last few days, Iran has initiated military action, firing rockets into Pakistan, Syria and Iraq. There are also fears that Israel could escalate its conflict with Hezbollah, the Lebanese militant group backed by Iran, with the level of violence between the two now at levels not seen since the 2006 war, according to Royal United Services Institute (RUSI) senior research fellow, Dr Tobias Borck. This is significant as that escalation could see Iran stepping in further, which in turn would likely bring the United States into the conflict.
Add to that, Red Sea cargo ships are now carrying armed guards on board to deter pirates from Yemen’s Houthis rebels, who are targeting commercial shipping vessels in support of Hamas.
The whole region is facing a substantial threat of destabilisation – something which would push gold prices significantly higher in the weeks to come as risk aversion becomes the dominant factor. Don’t delay. Buy gold now.
