The situation in the Gaza strip is unfortunately worsening by the minute. Israel’s military, the IDF, has stepped up attacks in response to Hamas missile strikes hitting deeper into Israel. The death toll is rising in the Gaza, and with fresh claims from Palestinian Authority President Mahmud Abbas accusing Israel of committing “genocide” in Gaza, you have a situation that could get worse before it gets any better.
Predictably, markets have responded with trepidation, as Middle East unease and economic weakness abroad have sent traders seeking safety in assets like gold. Jeff Kilburg of KKM Financial says the situation in Middle East is a legit catalyst to push gold higher beyond the short term.
The reason, Kilburg says in the attached clip, is that “the missiles that went into Israel where the furthest reaching missiles ever, about 60 miles in. So the traders here on the floor are trying to figure out what is the response – is it more missile attacks, or will there be an Israeli response of a ground attack.” According to Kilburg, that’s the “gamechanger.”
“I want folks to have that takeaway,” he says. “So owning gold, owning treasuries I think ahead of this is important.”
Kilburg’s take on gold has been fairly consistent, as back in June he was pounding the table to buy gold at $1300. “Geopolitical tension across the middle east, we’re looking at a lot of shorts technically above this $1330 level… We like from a back-and-fill perspective up to $1390 and we see resistance at $1425,” he advises. “So I think there’s more room to run for gold as we see this tumultuous situation in the Middle East.”
Switching gears to oil, surprisingly WTI crude oil is actually lower the past couple of days, but Kilburg says the oil trade will soon start to take off. “Since nothing’s happened today, you’re seeing a lot of folks unwind those long positions, however it’s still above $100 and we see it going back up, so this could be a good entry level if you believe the situation is going to get worse.”
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