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Gold is often seen as a safe shelter in the period of global conflicts, but wars and geopolitical conflicts, in the Bank of America, not long-term growth drivers for gold prices.
In fact, because Israel began to air attacks on Iran, gold has really dipped 2% per week. Meanwhile, tension landings as a Saturday reports B-2 Hidden Bombers They lead on the Pacific Ocean. This is the potential of the president Donald Trump participates in the conflict, potentially, massive banger barker bangers on aggravated Iranian nuclear sites.
In a note on Friday, BOFA analysts, gold prices, which represent 18% of gold prices from present levels, they expect to reach $ 4,000 for an ounce.
“Although the war between Israel and Iran is always exacerbated, the conflicts are usually not a sustainable throat driver.” “Thus, the trajectory of the US budget negotiations will be critical, and if the lack of financial shortages can be reduced, the fall from market volatility can attract more recipients.”
The Israeli-Iranian conflict drew attention from the Congress from the Tax and Spend Problem in the TRUC and spending. Although home and senate versions have the main differences that need to be reconciled before the law, the financial impact of the bill is expected to add trillions for the shortcomings in the coming years.
This has been taken to the global demand due to the flood of treasury bonds, which will be given to finance the sustainability and all red ink. Trump’s commercial war, US dollar, a traditional Haven asset, slipping against the other best currencies and evaluated the other, and gives more rapidly.
Through the Getty Imager via Michaela Handrek-Rehle-Bloomberg
There are central banks in the world He threw $ 48 billion in the treasury Since the end of the only March. At the same time, the central banks continue to buy gold, and the years continues a trend that has previously started.
Recently Survey from the World Gold Council found geopolitical instability and the contradiction of potential trade The main causes of central banks in the developing economy Changes to the golden side in a faster rate than in the advanced economy.
BOFA estimated the gold holdings of central banks, now it is only 18% of the unpaid public debt of the United States ten years ago.
“This must be a warning for US politicians. Trade and concern over the financial failure of the United States can share gold from the US treasures of the United States,” analysts warned.
Meanwhile, the market does not seem too much of gold yet. Bofa estimated that investors allocated a total of 3.5% of their portfolios.
Regardless of the congressional budgeting draft draft, the analysts said the deficits would be high.
“Therefore, market concern is unlikely to be the result of Senate talks in connection with the financial sustainability,” Bofa said. “Prices must support gold when the volatility and weak US dollars, especially the US Treasury or Fed, forced to step and support.”
