(Kitco News) – Even as the market signals overbought conditions and Asian demand dries up, the increasing chances of a direct military confrontation between Iran and Israel is driving safe-haven inflows into gold, according to Daniel Ghali, commodity analyst at TD Securities.
“Selling activity in Gold has been a bit limited, but the top traders still liquidated nearly 5t of notional Gold over the last week,” Ghali said in a research note. “This contrasts with Western investor sentiment. Our read of macro fund positioning remains at its highest levels since the Brexit referendum in July 2016; re-levering from risk parity and vol-target funds is supporting a reaccumulation from CTAs and prices continue to rally without challenge.”
Ghali said that American and European interest is being driven primarily by worries about inflation and currency debasement. “For Western investors, concerns surrounding monetary inflation are mounting as participants read the Fed’s reaction function as asymmetric, at a time when the US economy remains decent by many measures,” he said.
For the rest of this article: https://www.kitco.com/news/article/2024-10-02/iran-israel-conflict-driving-capital-inflows-gold-despite-overbought