Israel-Iran Conflict Heats Up After Gold Record High

Gold jumped to AU$4,160 before the weekend close. But as trading ceased, the Middle East conflict dramatically flared up. The significant escalation saw Israel unleash a targeted slew of airstrikes on Iranian military sites Saturday, marking a new high in the ongoing regional conflict. The attacks were in retaliation for Iran's Oct. 1 missile attack, in which close to 200 projectiles were fired at Israel in revenge for the killing of Hezbollah leader Hassan Nasrallah by Israeli forces in Lebanon.

Israel's latest campaign, which the country called "precision strikes”, hit Iranian missile production facilities, air defence systems, and other aerial capabilities without touching critical infrastructure such as oil and nuclear facilities. The U.S. applied pressure on Israel to avoid the critical infrastructure. The motive, reportedly, was to harm Iran's defensive capabilities while keeping the conflict contained.

The Israeli Defense Forces said the strikes targeted main military facilities, including ballistic missile sites and a clandestine research facility near Tehran that was working on "kamikaze drone" technology. Israel also blasted Hezbollah positions in Lebanon, along with other militant targets in Syria, as part of an ongoing effort against Iranian-backed militias. This campaign has thus far killed more than 2,500 in Lebanon, displaced over 1.2 million civilians, and exacerbated the humanitarian challenges there.

Responses and Statements

Iranian Foreign Minister Abbas Araghchi condemned the Israeli strikes as a "clear violation" of international law and said Iran "considers itself entitled and obligated to defend itself". Iran played down the damage, saying air defences had countered most of the strikes and minimised the impact. Still, two Iranian soldiers were reported killed. The government of Iran promised retaliation but hasn't yet specified how it will respond to the increasing aggression.

President Joe Biden was briefed ahead of the strikes, and officials confirmed the operation was one of “self-defence”. President Biden has urged caution, advising Israel to avoid any actions that could further destabilise the already volatile region. Others among its allies, particularly Gulf states like UAE and Bahrain, felt concern because of potential environmental and economic risks if there were strikes against oil facilities.

Risks of Regional War

The IDF said Iran had "paid the price" for recent attacks and warned that any new escalation would be met with further Israeli military action. The latest strikes have reignited fears of a broader conflict that could draw in the United States and impact neighbouring countries. For now, the decision by Israel to keep the strikes to military targets may yet be another sign of an effort to prevent further escalation, but whether this will succeed in stabilising things remains to be seen.