The worsening conflict in the Middle East significantly impacted the prices of commodities and raw assets.
On Saturday, Hamas militants attacked Israel, reviving the long-standing enmity that had been simmering for many decades. The brutal military operations further increased the likelihood of the conflict not being resolved in the near future.
This unsurprisingly caused a sharp increase in oil and precious metals prices, primarily due to the high risk of supply restrictions from the Middle East, as well as from the desire of traders to move away from risk.
If the conflict remains unresolved in the near future, oil will shoot up to $100 per barrel. Gold and other precious metals will also continue rising, and in the long term, gold may hit $2,000 per troy ounce.
In the forex market, no movement could be seen as traders monitor the situation. However, if the military actions do not end and the conflict even expands by involving neighboring Arab countries, dollar demand will surge.
Stock trading in Europe and the US will also start on a negative note, as the conflict will lead to a significant decrease in demand for company stocks, resulting in a noticeable decline in stock indices.
Forecasts for today:
WTI Oil
Oil prices sharply rose due to the escalating crisis in the Middle East. It currently trades at $86 per barrel, and any negative developments on the conflict will likely lead to the price consolidating above this level and potentially rising locally to $89 per barrel.
XAU/USD
Spot gold also surged with a gap at the start of trading, supported by the tension in the Middle East. If the price remains elevated and consolidates above $1856.00, there will be further increase towards $1880.00.
