Gold
and
oil prices
were falling early Thursday as tensions in the Middle East showed some tentative signs of calming.
President Joe Biden returned from his trip to Israel, having reiterated his support for the country after it was attacked by Hamas and after he secured a deal to allow humanitarian aid to the Gaza strip through Egypt.
Biden and Israel also said they had evidence that the blast at a hospital in Gaza Wednesday wasn’t caused by an Israeli strike. Nevertheless, protests erupted in Jordan, Turkey, and Iran against Israel.
The explosion at the hospital had raised worries that the conflict would spread, potentially directly involving large oil-producing countries such as Iran or Saudi Arabia. Investors had also bought gold as a haven asset.
Gold was down 0.4% at $1961.30 an ounce. It’s still up more than 4% over the past week and is 20% higher than this time last year. Prices are near their highest since August. Gold has outperformed the
S&P 500
on an annual return basis.
Investors tend to buy gold in times of uncertainty because it has a track record going back thousands of years as a good store of value. U.S. government bonds, another typical haven asset, haven’t fared as well recently because of concerns about inflation and the Federal Reserve keeping interest rates higher for longer.
West Texas Intermediate,
the U.S. oil standard, was 1.4% lower at $87.09 a barrel.
Brent crude,
the international benchmark, fell 1.6% to $90.03 a barrel.
The situation is still delicate and there’s still a risk of the conflict escalating.
Boeing
(ticker: BA) is speeding delivery to Israel of kits that convert unguided bombs into precision guided ones, Bloomberg reported Wednesday.
The conflict could be a catalyst for defense stocks, analysts have argued. Boeing was up 0.3% in premarket trading.
Lockheed Martin
(LMT) rose 1.1% on Wednesday.
Write to Brian Swint at [email protected]
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