Rising geopolitical tensions fuel safe-haven demand for gold

AMMAN — Gold prices have surged in Jordan and globally due to the recent escalations in the Israel-Hamas conflict. 

Waseem Hussein, an economic analyst, told The Jordan Times that geopolitical tensions and wars bolster and drive a shift in gold and silver prices and what transpired has activated the “usual uptrend” in gold prices.

“Prices of the yellow metal have for sure went up and are expected to continue rising in the coming days… It is considered a safe haven in times of crises and uncertainty,” said the analyst. 

He noted that gold traders internationally have reported an increase in gold prices by approximately 2 per cent.

Reflecting on other predictions, he said that geopolitical conflicts lead to what is known as “market anxiety” which prompts the public to place their investments in gold or silver.

Various news outlets have reported that the Israel-Hamas conflict is less likely to disrupt global supply chains when compared with the Russia-Ukraine conflict, as a result gold price hikes will not reach previous levels caused by Russia-Ukraine war.

Khalil Abdullah, a jeweller based in Amman, said that one gramme of 21 karat gold is sold for JD37.9 and purchased for JD36.6. He noted that the price differential is approximately JD0.2 since the start of the Israeli-Hamas conflict.

“Some customers are interested in buying gold out of concern amid ongoing tensions, while the majority cannot afford to buy gold or silver as a safe investment,” he said.

Abu Shaher, owner of a jewellery shop, said: “The ongoing war has certainly ignited fear in people and this has led some of them to buy gold coins”.

He said that he is offering a 20 per cent discount on gold production costs in order to incentivise people to buy gold.