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When wars begin, economic conditions can change greatly across the globe. When the war in question happens to be in the Middle East, many investors become downright skittish, quickly moving money to “safe haven” assets in case the conflict escalates.
With Israel now at war with Hamas, Hezbollah, and likely others in the coming days, even stock-loving Reuters is expecting the financial trends to move. According to an article published after the Hamas attack:
The violence in Israel will likely prompt a move into safe haven assets as investors closely watch events in the Middle East to gauge geopolitical risk to markets. Gunmen from the Palestinian group Hamas entered Israel in an unprecedented attack on Saturday. Western countries, led by the United States, denounced the attack and pledged support for Israel.
Rising geopolitical risk could see buying in assets like gold and the dollar and potentially boost demand for U.S. Treasuries, which have been sold off aggressively, analysts said.
“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 at Spartan Capital Securities, who predicted the dollar would also benefit.
War is always impactful but the Middle East’s ties to oil and its influence over geopolitical decisions makes it even more profound. Inflation, which is already too high, will likely spike unless the war turns out to be short-lived. According to Israeli Prime Minister Benjamin Netanyahu, this war will not be over quickly.
“We already started getting calls over the weekend, which is unusual because Monday is a bank holiday,” said Jonathan Rose, co-founder of Genesis Gold Group. “We’re mobilizing the team to handle the influx of rollovers and transfer retirement accounts that we expect to start by Tuesday.”
Genesis Gold Group has a unique interest in the Israel war because as a Christian precious metals company, they keep their fingers on the pulse of such important events.
The U.S. Dollar is expected to strengthen as it often does during international turmoil, but inflation will likely hamper true gains. Oil, which is central to the Middle East conversation, may be poised to stay steady despite the conflict. According to Reuters:
“Whether this is a massive market moment or not depends on how long it lasts and whether others are sucked into the conflict,” said Brian Jacobsen, chief economist at Annex Wealth Management, of the situation in Israel. Jacobsen questioned how much impact it would have on the oil price despite Iran having been boosting output.
The Hamas attack was openly praised by Iran and by Hezbollah, Iran’s Lebanese allies.
“It behooves Americans to move wealth or retirement out of volatile markets as soon as they can,” Rose continued. “Since gold and silver have a tremendous track record of helping people weather the financial storms, we’re preparing to help a bunch of Americans make the move this week.”
Contact Genesis Gold Group to learn how the process works for those wanting to move wealth or retirement into physical precious metals.
