UBS analyst Tilmann Kolb said this week, “A wider regional war could affect oil supplies, which would likely lead to quick price spikes. Gold, meanwhile, should serve its role as a more conservative asset,” As tensions rise in the Middle East, especially between Israel and Iran, investors are encouraged to look at gold and oil as possible safeguards against market ups and downs. Tilmann Kolb stresses that a wider regional conflict could disrupt oil supplies significantly, causing prices to spike. This situation underscores the value of oil as a hedge during uncertain times. At the same time, gold, known for its stability, is expected to do well as a safe-haven asset amid the chaos.
Recent events, such as the assassination of Hamas leader Ismail Haniyeh in Tehran and Iran’s threats of retaliation, have increased concerns about regional stability. The situation worsened with a deadly rocket attack from Lebanon, allegedly by Iran-backed Hezbollah, leading to Israeli strikes in Beirut. These incidents have heightened fears of a broader conflict, with reports suggesting that Iran’s Supreme Leader has ordered a direct strike on Israel. UBS analysts note that while no one benefits from an expanded conflict, the risk of unintended escalation remains high.
In response to these events, gold prices have risen, reflecting its role as a risk-protection asset. Analysts expect gold’s value to continue increasing due to higher demand from banks and possible changes in Federal Reserve rates. Given the current geopolitical uncertainties, adding gold and oil to investment portfolios could offer important protection against the risks of instability.
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