Gold regains its shine. The price of the king of precious metals rose 7% in October, to 1,888 euros per ounce. In dollars, gold even made an incursion beyond the psychological bar of 2,000 dollars, already visited in the spring following the outbreak of the banking crisis (shock on SVB and Credit Suisse, and concerns on Deutsche Bank) , which had caused “intense financial stress”, very positive for safe haven values (of which the yellow metal is one), notes the Comptoir national de l’or.
Last month, gold once again played its role as a safe haven, as geopolitical risk surged following Hamas’ deadly offensive against Israel. Since October 7, gold has in fact climbed by almost 10% in dollars, making it one of the best performing investments of 2023. Conversely, the rise in uncertainties has weighed down risky assets and therefore the CAC 40, which fell 3.5% in October. The performance gap between gold and the CAC 40 was thus in double digits last month, to the detriment of the flagship equity index of the Paris Stock Exchange.
CAC 40: “deep uneasiness” about the economy, the stock market driven by hopes for rates
The Israel-Hamas war raises geopolitical tensions, which supports gold…
Gold has thus clearly benefited from the war in the Middle East, “at the center of all concerns, particularly at a time when international balances are in full (r)evolution,” notes the Comptoir national de l’or. While the Geopolitical Risk Index reached a peak on October 19, since the early 2000s, only three events had brought it to higher levels: the attacks of September 11, 2001, the war in Iraq in 2003, and Russia’s invasion of Ukraine on February 24, 2022.
Gold traditionally behaves as a safe haven par excellence in the event of severe geopolitical crises. Even more so when the latter have “the potential to change global balances”, argues the Comptoir national de l’or, which underlines that a recent statistical analysis carried out by the World Gold Council (the World Gold Council ) shows that an increase of 100 points in the geopolitical risk index translates into an increase of approximately 2.5% in the price of gold. This was verified with the Israel-Hamas war, since the index gained 350 points between the lowest and the highest in October.
“The CAC 40 will fall for months and watch out for a storm in real estate”
Momentum correctly anticipated the trajectory of the CAC 40 and gold
Momentum, Capital’s premium investment newsletter on the stock market (and gold and cryptocurrencies), has correctly anticipated the path of gold and the CAC 40 in recent months. The rise in gold followed shortly after our bullish anticipation. As for the CAC 40, it fell back” as predicted by Momentum to the area of 6,800 points, before rebounding. A recovery that we have also been able to support here, with numerous gains for our readers.
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