Israel-Hamas conflict is a 'helper' for oil and gold, experts say too early to assess impact

The conflict between Israel and the Hamas Islamist movement - the force that controls the Gaza Strip - is becoming a factor supporting the prices of oil and gold - assets considered a safe haven for investors.

The Hamas-Israel conflict is expected to have a strong impact on oil and gold prices. (Source: CNBC)

In Asia, in the morning trading session on October 9, Brent oil price increased 4.7% to 86.65 USD/barrel, while US light sweet crude oil price (WTI) also increased 4.5% to 88.39 USD/barrel.

Analysts at ANZ Bank said that increased geopolitical risks in the Middle East will support oil prices, with the possibility of further volatility in the coming time.

Meanwhile, analysts at Australia's CBA bank said that a tightening oil market in the fourth quarter of 2023, combined with supply disruptions due to Iran's oil export cuts, could push Brent futures above $100 a barrel in the short term.

Currently, investors' demand for gold has begun to increase, causing the price of this precious metal to increase by 0.8% to 1,848 USD/ounce.

Experts say the increase in gold prices despite the increase in two profitable assets, bond yields and the US dollar, is due to the increased conflict in the Gaza Strip.

* Conflict in the Middle East could expose central banks to new inflationary trends, while also undermining confidence in the economy at a time when there is renewed hope of controlling inflation.

The impact of a conflict becomes apparent over time and depends on how long it lasts, how intense it becomes, and whether it affects other countries in the region.

Bank for International Settlements General Director Agustin Carstens said it was too early to assess the impact, although stock and oil markets could be affected immediately.

However, the conflict could at least add to a host of unpredictable factors for an already slowing global economy, with US markets still adjusting to the possibility that the US Federal Reserve will keep interest rates high for longer than many investors expect.

Any economic uncertainty slows decision-making and increases risk premiums, especially given the region's concerns about the oil market's opening trend, said Carl Tannenbaum, chief economist at Northern Trust.

Source