“The reaction of the gold market before the conflict in climbing between Israel and Iran is still very moderate”Julius Baer analysts wrote.
What happens is that the value of the ingot rose less than 1% from the initial attacks of Israel, a motion that the firm mainly attributes “Automated speculators and trading systems in the futures market more than a physical demand for safe refuge.”
They add that, although geopolitical tensions typically cause short -term peaks in goldHistory shows that such movements rarely endure unless there is significant economic disruption.
“Deviations from this pattern have only occurred when the conflict had a significant economic impact“, they said, and made a second crisis of the oil In 1979/1980 as a rare exception.
Julius Baer does not expect the current situation to climb at that level. “We believe that the risk of such interruptions in the oil supply is very low, as well as the risk of a closure of the Ormuz Strait.”they said.
Other variables to take into account
The response of the allies of both nations was also mesurad, making a greater regional escalation less likely. Even so, the firm sees the conflict as a support for the widest bullish perspective of gold.
“The demand for those who seek safe refuge should remain strong amid the prevailing economic and political uncertainties”indicated the note.
It is also expected that the purchase of gold by the central banks will remain firm while the nations seek to reduce the dependence of the US dollar.
Julius Baer reiterated his “constructive” vision of gold, citing a favorable fundamental panorama despite the reaction limited to tensions in the Middle East.
Source: Ambito
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