Crude oil and gold have soared due to rising tensions in the Middle East and the conflict between Ukraine and Russia. Rising demand for safe-haven assets is likely to support the price of gold. Bullish momentum in the oil market may persist amid tight supply.
Recently, both The price of oil and gold skyrocketed due to the increase in tension in the Middle East and to the ongoing conflict between Ukraine and Russia. The US Department of Defense announced plans to deploy a missile submarine in the Middle East, as Israel prepares for a possible military attack by Iran following the assassination of Hamas leader Ismail Haniye.
This fact has increased concern about the possibility that the situation could degenerate into a broader regional conflict. On the other hand, Russia has initiated extensive Civilian evacuations from Kursk and Belgorod before the advance of Ukrainian forces into Russian territory.
On Tuesday, gold futures on the Comex division rose 1.2%, approaching its all-time high of more than 2,500 US dollars per ounce recorded on August 2. This rise reflects greater demand for safe-haven assets amid escalating military tension between Iran and Israel.
Similarly, concerns about possible supply disruptions has driven up crude oil pricescon Brent and WTI futures rising more than 3%, to 81.77 and 78.25 dollars per barrel, respectively, marking their highest levels in three weeks.
Both the price of gold and oil experienced a slight decline during the session the asian stock market on Wednesday, as risk aversion eased with a rally in stock markets across Asia, especially in Japan. Despite this setback, the prices of the two main raw materials are likely to continue to suffer upward pressure, given the current macroeconomic environment.
Gold may receive a new boost as a safe haven asset
He gold spot price rose on Tuesday to reach 2,473 US dollars per ouncebefore falling back to $2,464 at 8:00 a.m. this Tuesday, Central European Time.
This level is just below its all-time high a month ago, and the momentum could push it past that mark and set a new record if the trend persists.
Several factors are driving this rally. First of all, hehe recent market turbulence have increased demand for safe-haven assets as investors flee equities; in particular, technological values. Second, the risks of a broader conflict in the Middle East continue to support the rally in precious metals.
Finally, macroeconomic changes reinforce the upward trend long term gold. Cooling inflation and the forecast for tapering rate hikes in major economies, especially given the widespread expectation that the US Federal Reserve will initiate rate cuts in September, are likely to put further pressure on the dollar. US, which in turn supports gold prices.
Furthermore, growing fears of a recession, in a context of softening of US economic data over the past monthhave made gold a more attractive safe haven investment.
Oil prices rise on fears of insufficient supply and technical bets
Oil markets They rose more than 4% last weekand gains accelerated on Tuesday. The increase in demand and the escalation of tension in the Middle East are the main bullish drivers of oil prices.
Upcoming inventory data from the U.S. Energy Information Administration (EIA) will be crucial for future market trends as stocks are six consecutive weeks decreasinguntil August 2. According to the EIA, OPEC+ production cuts are expected to reduce global oil inventories over the next three quarters, driving crude oil prices higher.
In June, OPEC and its allies agreed to extend production cuts of 3.66 million barrels per day until the end of 2025, with additional voluntary cuts of 2.2 million barrels per day until September of this year. The organization, which represents more than 37% of the total world oil supply, has been reducing production from 2022, which has led to a total cut of 5.86 million barrels per day, representing 5.7% of global demand.
Additionally, traders are responding to technical signals, including a double bottom pattern evident on oil futures price charts. Notably, WTI futures prices have broken above the 50-day moving average for the first time since July 19. Are Combined bullish signals may encourage traders to maintain its positive outlook on oil prices.
