The escalating conflict between Iran and Israel is sending shockwaves through global markets, with rising concerns over the potential impact on gold and oil prices. Israel’s long-anticipated retaliatory airstrikes on Iran late Thursday have heightened geopolitical risks, raising fears of further escalations.
Gold, oil prices react to rising tensions
Following the Israeli strikes, which targeted military sites in Tehran and other regions, investors shifted focus to gold and oil markets.
Analysts are warning that if tensions continue to escalate, gold prices could surge towards $2,800 per ounce, while Brent crude oil may approach the $80 per barrel mark.
On Friday, gold closed at $2,747 per ounce, a 0.5% increase, while Brent crude oil saw a 2.25% jump, reaching $76 per barrel.
Market analysts warn of further price hikes
Analysts point out that Iran’s response to the Israeli strikes will likely keep geopolitical risk perceptions high, leading to further potential price increases. Citi Research has projected that, given the Middle East’s volatile situation, gold could hit $2,800 in the next 1-3 months and $3,000 over the next 6-12 months.
The previous week saw gold prices reach an all-time high of $2,758 before slightly retreating. Citi Research has highlighted that climbing oil prices, spurred by regional instability, could further drive up gold prices.
Oil supply concerns loom large
Israel’s airstrikes, accompanied by explosions in Syria and strikes on targets in Lebanon, have also sparked fears of oil supply disruptions.
If the conflict continues without de-escalation, the risk of Brent crude oil prices surging to $80 per barrel remains significant.