Gold Stays Stable Amid Middle East Tensions as China Buys In

The ongoing conflict in the Middle East has led to increased tensions and concerns about oil prices. However, despite this, gold prices have remained relatively stable, hovering around $4,000 an ounce.

This may seem counterintuitive, as one would expect gold to rally during times of war and uncertainty. However, the real interest rate has been rising, making it more expensive to hold gold compared to other assets.

The recent purchases by China's central bank are a notable exception to this trend. They have been accumulating gold at an accelerated pace, even as the price has fallen.

China's actions may be seen as a vote of confidence in gold as a safe-haven asset. Legendary hedge fund manager John Paulson also believes that we are still in the early stages of a long-term gold rally.