In trading on Tuesday, oil prices jumped and gold briefly hit an all-time high. Investors rushed into traditional protective assets after the Israeli military announced an attack on the Hamas leadership in Qatar.

Details

Brent crude oil contracts jumped by 1.5% to almost $67 per barrel at trading on Tuesday. Futures for U.S. West Texas Intermediate (WTI) oil rose by the same amount - to $63.2. The cost of gold on the spot market jumped by 1% to $3674.2 per troy ounce, which became a new historical record. Then, however, the growth slowed down to 0.2% ($3643).

Context

Investors began buying up traditional defensive assets after reports of an Israeli attack in Qatar, Bloomberg reports. The Israel Defense Forces launched a pinpoint strike in Doha against the leadership of Hamas, a recognized terrorist organization in the U.S. and Europe. The news heightened fears of widening conflict in the Middle East, which provides about a third of the world's oil supply, and raised the risk premium on the energy commodity, Bloomberg adds.

"The immediate reaction in the form of a spike in oil prices and a further rise in gold looks quite logical. It is unlikely that serious retaliation will follow, especially amid reports that the U.S. supported the strikes, and Qatar's immediate reaction does not indicate a desire for retaliation or further escalation," Michael Brown, senior research strategist at Pepperstone in London, said in a Reuters note.

"I expect the rise in oil prices to taper off quickly, as has usually happened in recent months with geopolitically-induced spikes, when passions subside and attention returns to fundamentals in an already oversaturated market, with OPEC+ adding more barrels from the start of next month," he stated.

This article was AI-translated and verified by a human editor

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