Global Markets Brace for Impact as Israel’s Conflict with Hamas Intensifies
Fear across global markets is expected to hit fever pitch in the coming week, with stock markets likely tanking and favorite commodity plays oil and gold rising, as Israel enters the much-anticipated heightened phase of its war with Hamas, attacking Gaza from land, air, and sea.
Analysts anticipate a renewed rush into safe-havens like oil and gold, as investors seek shelter amidst escalating tensions. Gold, which hit $2,000 an ounce in Friday’s post-settlement trade itself, is likely to see a significant uptick. Similarly, oil prices are expected to remain volatile, with uncertainty surrounding the impact of the war on crude trade.
Despite the fighting occurring right beside some of the world’s biggest crude exporters, including Iran, the fifth-largest shipper of the commodity and an avowed Hamas supporter, Middle East oil traffic has not been significantly impacted so far.
John Kilduff, a partner at New York energy hedge fund Again Capital, describes the situation as a “mess” for oil traders, as they navigate through unpredictable market conditions driven by headlines and volatility.
Oil Market Outlook
New York-traded WTI crude for delivery in December experienced a volatile week, ending 3.6% lower. Technical analysis suggests immediate resistance at $85.50, with further challenges at $86.50 and $88.30. On the flip side, consolidation below $86.50 and $88.30 may lead to a retest of support levels at $83.50 and $82.50.
Gold Market Outlook
Gold bulls regained strength as the precious metal returned to the coveted $2,000 an ounce territory. With geopolitical tensions in the Middle East and strong chart positioning, gold’s next logical targets are $2,035, $2,055, and the major resistance level of $2,080. However, traders should exercise caution as any slowdown in fighting or a decrease in headlines may trigger a sharp correction.
Natural Gas Market Outlook
Natural gas prices jumped 9% on the week, driven by concerns about an impending data blackout on associated gas production and a smaller-than-expected storage build. Cold temperatures forecasted for the coming week further support the bullish sentiment. Price consolidation is expected to be limited to the $3.03 level, with potential for an upward rebound towards the 200-week Simple Moving Average of $3.78.
Overall, global markets are bracing for the impact of Israel’s intensifying conflict with Hamas. Stock markets are expected to tumble, oil prices to remain volatile, and safe-haven assets like gold to rise. It is a period of uncertainty and unpredictability, requiring cautious navigation for investors and traders alike.
