The oil and metals markets experienced significant reactions on Friday due to developments in the Middle East. Israel Defense Forces (IDF) announced that they were expanding ground operations in Gaza, leading to concerns about the potential spread of the conflict between Israel and Palestine to the broader Middle East, an important energy supplier and a vital oil shipping passageway. As a result, oil prices surged by nearly 3%, reaching a one-week high. The global benchmark Brent futures rose by $2.51, or 2.85%, reaching a settlement price of $90.44 per barrel. Similarly, the US benchmark West Texas Intermediate (WTI) crude spiked by $1.95, or 2.3%, settling at $85.16 per barrel.
A projection by Bloomberg Economics had earlier suggested that if Iran became involved in the conflict, oil prices could potentially reach $150 per barrel. These concerns about the implications for oil supply and regional stability contributed to the sharp increase in oil prices.
Concurrently, gold prices shot up above $2,000 an ounce for the first time since August. Investors sought refuge in the safe-haven asset, a typical move during times of economic or geopolitical instability. Gold futures for December settled at $1998.50 an ounce during Friday’s official trading session, but rose further to $2,017.85 in post-settlement trade, representing a 1.02% increase for the day.
Bart Melek, the managing director and head of commodity strategy at TD Bank, remarked, “We’re seeing this spike as Israel moves into Gaza, and there’s now a growing risk this might become a broader conflict.” Gold prices have surged by approximately 9% since the escalation of the Israel-Palestine conflict following a surprise attack by the Palestinian armed group Hamas on Israel on October 7. Experts and traders anticipate that the uncertainty in the region will continue to drive gold prices higher.
In addition to gold, silver, another asset that preserves wealth, also experienced a slight upward movement on Friday. Futures for December delivery closed at $23.24, marking a 1.47% increase. Since October 7, silver prices have rallied by approximately 10%.
The situation in the Middle East continues to evolve, and the markets will closely monitor any further developments. Traders and investors will keep a keen eye on the potential impact on oil supply, as well as the geopolitical consequences that may affect the prices of gold and other precious metals.
For more updates and information, follow the live updates on the situation in the Middle East. Additionally, for more stories on the economy and finance, visit RT’s business section, where further analysis and coverage of these market movements can be found.