The recent brief rise in the price of Gold is – at least in the press – being attributed to falling US interest rate expectations on the one hand and fears of an escalation in the Middle East conflict following the intensification of the clashes in the Red Sea on the other. In our view, however, the former is likely to be the main driver of Gold's strength. 

Furthermore, fears regarding an escalation of the Middle East conflict are likely to center primarily on the risk of another energy price shock. However, neither the oil price nor the European gas price have recently been able to benefit sustainably from the increasing tensions.