Post by : Jyoti Gupta

Gold and oil prices went up because the world is watching closely to see what Iran will do after the US joined Israel in attacking Iran over the weekend. People are worried this could lead to a bigger war in the Middle East.

Gold rose by about 0.8% at first but then lost most of that gain. This happened after the US hit Iran’s three main nuclear sites. Investors became nervous and started buying gold and US dollars, which are considered safer in uncertain times.

Oil prices also jumped because people feared that Iran might strike back by damaging oil facilities or blocking ships in the Strait of Hormuz, an important route for oil shipping. The US oil price, called West Texas Intermediate, went up by 2.5%, and it had risen even more when the market opened.

The US dollar became stronger compared to the euro and other major currencies. Meanwhile, US stock futures dropped.

An expert said that markets could be very unpredictable now, What the US President does next—whether more attacks or talks—will decide how markets behave.

Gold has already gone up nearly 30% this year. While fear of war is making people buy gold, rising oil prices could increase inflation, making interest rate cuts unlikely. That could slow down gold’s growth because gold doesn't earn interest.

So far, Iran hasn't responded with a big attack. Russia and China might only support Iran with words, and Iran’s allied militias are not taking strong actions either. Iran may also avoid upsetting China, which buys a lot of oil.

Gold is now just about $125 away from its highest price ever. That’s one reason why its price didn’t rise much more.

An expert said that fear of a bigger war in the Middle East is making people buy gold to protect their money. Uncertainty and central banks keeping interest rates low will likely keep gold prices high for now.

At the same time, traders are watching new economic data from Europe and the US to see how trade tensions are affecting factories. The European Central Bank President is also expected to speak soon.

Another market expert warned that global stock markets could fall quickly because of oil supply fears and unresolved trade problems between major countries.