Safe-haven demand has been driving gold prices higher to the cusp of $2,000 per ounce and has helped the precious metal outpace the S&P 500 stock index so far in 2023, MarketWatch reported this week.
Bullion has rallied approximately 10% since the surprise attack by Palestinian armed group Hamas on Israel on October 7. Experts and traders forecast that geopolitical tensions and the uncertainty in the Middle East will continue driving gold prices higher.
Investors traditionally turn to gold in times of market uncertainty to hedge risks and as a store of value. Throughout history, bullion has been seen as a safe haven during periods of economic instability, stock market crises, military conflicts, and pandemics.
“The brutal Hamas attack on Israel sent shock waves around the world – and sent the price of gold soaring,” Brien Lundin, the editor of Gold Newsletter wrote in a monthly outlook, according to MarketWatch.
The S&P 500, the index that tracks the performance of 500 of the largest companies listed on US stock exchanges, has gained around 8% since January 1, while front-month gold futures have risen 9.2% during the same period, according to the report, citing Dow Jones market data.
Gold futures for October delivery, the current front-month contract, climbed to $1987.20 per ounce on Thursday, its highest settlement value since May 16. The price has risen more than 7.5% since the start of this month.
Meanwhile, the S&P 500 is heading for a third straight month of declines, MarketWatch wrote, noting that if the index finishes October in the red, it would mark the first time the large-cap index has fallen for three consecutive months since March 2020.
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