Iran's missile strike on Israel rattles commodity markets
The Iranian Revolutionary Guard reported on Tuesday evening that Iran launched dozens of missiles toward Israel in retaliation for the death of a Hamas leader. It threatened another attack if Israel responds militarily. These events are affecting, among other things, oil and gold prices, albeit slightly.
"Iran's actions towards Israel did not elicit a significant reaction in the currency market. The dollar was already gaining earlier on Tuesday, supported by the words of the Federal Reserve chairman who expressed his preference for moderate interest rate cuts," writes Marek Rogalski, chief currency analyst at the Brokerage House of the Bank Ochrony Środowiska, in a commentary for money.pl.
Iran attacked Israel. Dollar reaction
As the expert adds, it is worth refraining from hasty assessments of the situation. "We do not necessarily have to see a repeat of what we observed this spring, and the risk of a regional conflict emerging again is considerable. An open question is also its timing – a month before the US elections – which raises questions about US involvement in defending Israel and the US administration's pressure on Tel Aviv to refrain from a strong retaliation," Rogalski points out.
Oil and gold
More significant movements can be seen in oil and gold prices. "They are increasing the gains that appeared on Tuesday afternoon after the first leaks from the US administration that Iran might be urgently preparing a retaliatory attack. Paradoxically, excessive nervousness is not visible on the New York Stock Exchange either. The markets are simply treating this for now as another strong incident, rather than the beginning of a larger conflict," the analyst summarizes.
On Tuesday after 2 PM EDT, a barrel of crude oil cost a little over CAD $93. At the same time, the market price of an ounce of gold was CAD $2,270.
