On Friday, oil and metal markets spiked on Middle Eastern news of Israeli Defense Forces (IDF) announcing they would be “expanding ground operations” in Gaza.
The price of oil spiked 3%, hitting a one-week high as fears grew that the conflict between Israel and Hamas could spread out, involving other nations in the Middle East, a region crucial to the supply of the global oil and gas markets, and vital for shipping of the commodities.
Brent crude, a global benchmark increased $2.51, for an increase of 2.85%, settling at $90.44 per barrel. West Texas Intermediate, the American benchmark, rose $1.95 for a gain of 2.3%, settling at $85.16 a barrel.
Bloomberg Economics has previously predicted that if Iran were to enter the conflict, the increased enforcement of sanctions on its crude shipments, as well as its potential blockade of the vital shipping pathway through the Strait of Hormuz, could drive the price of oil on the global market to $150 per barrel.
At the same time, gold rose above $2,000 per ounce, exceeding that threshold for the first time since May, as investors moved into the safe-haven asset, a move commonly seen as geopolitical conditions grow unstable. December gold futures ended Friday’s trading session at $1,998.50 per ounce, but post-settlement trading saw the price trade up to $2,017.85, up $20.45, or 1.02%, for the day.
In an interview with Bloomberg, Bart Melek, managing director and head of commodity strategy at TD Bank, said, “We’re seeing this spike as Israel moves into Gaza, and there’s now a growing risk this might become a broader conflict.”
Following a surprise attack by the armed Palestinian militant group Hamas, targeting Israeli citizens in the border region with Gaza on October 7th, gold has risen about 9%. Experts and traders warn that bullion prices will continue to rise as the uncertainty in the region grows with the escalation of the conflict.
Meanwhile, silver, another safe-haven asset for preserving wealth in times of uncertainty edged higher Friday, as well, with December futures closing at $23.24, an increase of 1.47%. Since October 7th, Silver has rallied about 10%.
