A powerful rally drove the gold price to the $2,000 mark, yet again, on October 20, as the precious metal hit an intra-day high of $2,009 the ounce, the culmination of buying ignited by the outbreak of war in the Middle East. With the fighting expected to intensify, stocks sold off and bond prices tumbled, pushing up yields, which move inversely to prices—normally a negative for gold.
“This is a good example of why people need gold in their portfolios. It is a perfect hedge against international turmoil,” said Peter Cardillo, Chief Market Economist of Spartan Capital Securities. “It always is wise to have a certain percentage of your portfolio in gold. I remain bullish on gold—we could see gold by the year end top $1,400, possibly $1,450.”
There is danger the Mid-East conflict could widen. Iranian-backed Hezbollah forces in Lebanon have been firing missiles at Israel. Separately, a U.S. warship in the Red Sea shot down three missiles from Yemen flying towards Israel, which the Defense Department said were fired by Iranian-backed Houthis.Gold has repeatedly jumped above $2,000 the ounce this year, first breaking out from the $1,800 level in March, reaching $2,000 later that month, and then achieving a peak of $2,055 on May 4. Gold also topped $2,000 in late July and early August.
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