Iran Attacks, Israel Says it’s ‘Not Over Yet’ – Gold Jumps

Iran has issued a warning to both Israel and the United States, indicating a potential for a larger response if there's any retaliation for its recent drone and missile assault on Israeli territory. Israel, in turn, has stated that 'the campaign is not over yet'.

The attack was launched in retaliation for a suspected Israeli strike on its consulate in Syria, marking a significant escalation in direct conflict between the two nations and heightening concerns about a broader regional war.

Recent market trends have shown a tendency to downplay geopolitical conflicts, but Israel, USA, and Europe's successful defence against Iranian missiles could also help soften the blow. It is estimated that 99% of Iranian drones and missiles were shot down by Israel and its allies. However, there's an acknowledged increase in geopolitical risks in the Middle East, indicating potential volatility ahead. 

Looking at BTC, for example, shows that it dropped aggressively following the news. This could be an early warning for the stock market since both have been referred to as 'risk'. The major difference in this instance is that BTC trades 24/7, and the stock market has a weekend close. If their movements are still staying connected, that could call for a significant drop in stocks.

The significance of Iran's attack on Israel is emphasized, with anticipated consequences for oil prices and concerns over potential disruptions in the supply chain. The biggest factor could be a partial blockade of the Strait of Hormuz. There's also a warning about the heightened risk of regional conflict leading up to the U.S. elections. It will be important for the Biden administration to look competent and tough, rather than seeming to be haphazardly roped into defending an ally. This could lead to attempts to either de-escalate, which could backfire as a sign of weakness, or take heavy-handed action, which could inadvertently escalate conflict shortly afterward.

A continued rise in oil prices could adversely impact U.S. bond fundamentals by prolonging inflation, which then could reduce the likelihood of rate cuts by the Federal Reserve. Despite market nervousness, one can see that the equity market has already accounted for a significant amount of risk. Analysts have been working hard to seemingly downplay the situation, but it's ultimately unclear if de-escalation is certain.

Gold has been rising substantially even before the conflict emerged, and it has only continued in the last week. We will see upon market open how the aggressive escalation weighs on the market. So far, not even a delay in rate cuts has been able to stop gold's ascendence.

Whilst most of the world does not have the ability to trade gold over a weekend, our Gold Standard (AUS) 100% gold bullion backed tokens trade 24/7 on CoinSpot (Australia’s Largest Exchange) and MRHB DeFi Network (decentralised trustless exchange and TijarX wallet) and it was a huge weekend of trade as people bought up gold before the market open this morning (which at time of finalising this article jumped A$40 on open!!). You can also buy Silver Standard (AGS) on CoinSpot here 24/7 too. You can learn more and see the Proof of Reserve holdings any time at goldsilverstandard.com.

The escalating Middle East situation has gold looking at both geopolitical safe haven AND financial markets risk-off movements. All eyes on Asian trade today before Europe and the U.S. tonight.