Following the unexpected Hamas attack on Israel over the weekend, gold prices are much higher in early U.S. trade on Monday. Due to the recent huge geopolitical shock that has traders and investors alarmed, safe-haven demand highlighted. December silver was up $0.047 at $21.77 and December gold prices was last up $18.40 at $1,863.40.
The majority of equities in Asia and Europe fell overnight. When the New York day session starts, U.S. market indices are pointing to lower beginnings. Following the weekend Hamas attack on Israel that resulted in the deaths of hundreds of civilians and the abduction of hostages, the market is uneasy. Israel responded angrily and went to war with Hamas. In Israel, this is the most violent incident in the last 50 years. Given the significant political and economic consequences of the Hamas attack over the weekend, risk aversion is strong to start the business week. The American military is expanding its presence in the Middle East.
The big Middle East crisis anticipated to have an effect on global economies, particularly central bank policy, in the upcoming months. There are also rumors that the Israeli-Hamas conflict may have an effect on Congress in the United States and the process of choosing a new Speaker of the House of Representatives.
The U.S. Treasury market closed on Monday since it is a federal holiday in the United States. The majority of markets, including the futures markets for US Treasury securities, are open today.
In the midst of the global crisis, there is also “flight to quality” buying going on for the US dollar and US Treasury bonds. The price of crude oil on the Nymex is now hovering around $85.50 a barrel.
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