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Gold and Silver Price Forecast: Geopolitics Send XAU/USD & XAG/USD Flying

Gold (XAU/USD) and silver (XAG/USD) were wounded after September U.S. inflation beat consensus estimates and sparked a surge in U.S. Treasury yields, but managed to stage a remarkable turnaround on Friday, rallying about 3.2% and 4.0% respectively on risk-off mood, brought on by escalating geopolitical tensions in the Middle East.

The financial world has been on edge following the Hamas terrorist attacks in Israel, but a full-fledged flight to safety hasn’t yet been observed. However, sentiment has begun to deteriorate after Israeli Prime Minister Benjamin Netanyahu warned civilians in Gaza to begin evacuating the northern part of the enclave ahead of an invasion.

While the situation is in a state of flux and subject to change, some traders believe that a possible Israeli incursion into the Gaza Strip, designed to secure the coastal territory and disrupt Hamas operational facilities, could backfire. Such a move could unintentionally trigger more violence by potentially drawing other nations into the conflict, ultimately prolonging instability in the region.

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