Gold Surpasses $2,000 Amid Rising Investor Interest as a Hedge Against Gaza Invasion Concerns

Gold bulls reclaimed the $2,000 per ounce level, which had eluded them for the past two months. Investors sought refuge in safe-haven assets due to increasing concerns that Israel might proceed with a full ground invasion of Gaza to remove Hamas militants from Palestinian territory.

The most active gold futures contract on New York’s Comex, for December, closed the official trading session on Friday at $1,998.50 per ounce, registering a modest gain of $1.10 or 0.05%. However, in after-hours trading, the benchmark gold futures contract exceeded its Friday high, reaching $2,017.85 at 15:35 US Eastern Time (19:35 Greenwich Mean Time), reflecting a daily increase of $20.45, or 1.02%.

This post-settlement surge in gold prices followed a flurry of headlines related to the ongoing Middle East conflict. Israel and Hamas remained far from a resolution despite extensive mediation efforts by the United States and other global powers. A Hamas official linked the release of hostages in Gaza to a ceasefire in Israel’s bombardment of the Palestinian enclave. Israel indicated its readiness for a ground invasion, but it faced calls from the US and Arab countries to delay an operation that could lead to more civilian casualties in the densely populated coastal strip and potentially trigger a wider conflict.

John Kilduff, a partner at the New York energy hedge fund Again Capital, described the situation as a “mess,” with traders uncertain about the direction of events and reacting to a constant stream of headlines. He noted that the volatility in the market was providing opportunities for volatility traders.

The spot price of gold, closely monitored by some traders, reached $2,007.13, marking a gain of $22.24 or 1.1%, following a session high of $2,009.41.

Sunil Kumar Dixit, the chief technical strategist at SKCharting.com, pointed out that with spot gold surpassing the $1,998 resistance level and reaching $2,009, the next significant targets were $2,050 and $2,075. He also noted that immediate support for spot gold had shifted higher to the $1,990-$1,980 range.

Israeli forces conducted a major ground attack on Hamas in Gaza overnight, and Prime Minister Benjamin Netanyahu indicated that Israeli troops were still preparing for a full ground invasion. While mediation efforts were ongoing, the possibility of Iran, the fifth-largest oil producer, becoming involved in the conflict appeared to be growing with each passing day of the three-week-long war. Tehran, a vocal supporter of Hamas, had been provoking its ally, Washington, since the beginning of the conflict. The U.S. military struck Iranian targets in Syria on Friday, leading Iranian Foreign Minister Hossein Amirabdollahian to issue a warning that the United States would “not be spared from this fire.”

In a separate incident, projectiles hit two Egyptian Red Sea towns on Friday, causing injuries to several individuals, highlighting the risk of regional spillover from the ongoing conflict.