Israel just bombed almost all of Iran’s military installations in Syria. This was in response to attacks from some of those units on the Golan Heights, which is held by Israel. This is perhaps as close to open war as Iran and Israel have gotten.
No surprise, then, that gold is up today…
Geopolitical disturbances like this often boost gold prices. But before gold bugs break out the champagne, they should remember that as soon as the flashpoint du jour blows over, gold usually goes right back to whatever it was doing before.
Even protracted fighting that could affect the world’s major economic powers—such as the recent conflict in eastern Ukraine—tends to boosts safe-haven buying only during the initial rush of alarming headlines.
In fact, examining the last two times the US went to war, the price of gold rose during the pre-war media blitz and fell when the actual fighting started.
Lesson: don’t run out and buy gold—or gold stocks—on days when journalists are sounding the war sirens. Those could well work out to be times for taking profits. And the subsequent lulls could be great times for buying.
I’m watching for that, because I have a shopping list of stocks I want to buy—at lower prices.
