Gold at an all-time high, oil above 90 dollars a barrel, volatility skyrocketing. The latest snapshot of the markets, taken before Iran launched drones and missiles once morest Israel, already showed signs of very high tension. If there are no further negative developments, prices might therefore cool down in the short term, rather than heat up further, even if geopolitical risk has increased.
«Buy the rumor, sell the news», says an old adage. And everything can be said except that Tehran acted by surprise. Retaliation had been announced since the first hours following the attack on the Iranian consulate in Damascus, Syria, which occurred on April 1st. And on Friday the 12th the United States warned of the imminence of retaliation once morest Israel. We knew that “something” would happen soon. And investors – even more so in view of the weekend, when the markets are closed – had prepared themselves, intensifying a rally which is certainly nothing new.
The wait for the markets to reopen
In the session on Monday 15th, oil might therefore “surge at the opening because it is the first time that Iran has hit Israel from its territory – hypothesizes Giovanni Staunovo, of UBS Group – but how long the leap will last depends on the Israeli response”.
The bull run in gold and oil has been gaining momentum for weeks, fueled only in part by geopolitical tensions (in the Middle East and in relation to the war between Russia and Ukraine). These issues are intertwined with others – which in any case will not easily disappear from the radar – linked to the changing scenarios of the global economy and equally changing expectations on monetary policies.
To top it all off there are increasing doses of speculation, with hedge funds returning to bet on increases in raw material prices and increasingly exposed to increases in gold and oil in particular. In the case of bullion, the funds’ net long positions (at purchase) are at their highest level in four years in New York, where some analysts – amazed by the strength of the rally – hypothesize suspicious maneuvers on the options market.
#Gold #oil #records #increases #escalation #stop
2024-04-16 16:04:34
