Will the Iran-Israel conflict lead to higher gold and oil prices? Economist Mohamed A. El-Erian says… | Mint – Mint

Highlighting the risk of increased geopolitical tensions in markets amid the Iran-Israel crisis, senior economist Mohamed A. El-Erian said on Sunday that the current situation could lead to “an increase in oil prices.” gold and oil, as well as lower U.S. Treasury yields and stocks than would have been the case.” otherwise it prevailed. »

The current crisis between Israel and Iran has exacerbated tensions in the Middle East. Many countries have expressed fear of the consequences of a further escalation of the situation on world peace.

“In the short term, a key question for markets is whether the latest escalation in tensions between Iran and Israel is over or whether further escalation is ahead.”

“At the same time, underlying geopolitical risk has increased, regardless of investors’ collective opinion on the first point during Monday’s trading. This would imply higher gold and oil prices, and lower yields and U.S. Treasury stocks than would otherwise have prevailed,” the head of state said. wrote Allianz’s economic advisor in an article on X.

In one of his previous articles on X, Mohamed A. El-Erian highlighted the rise in oil prices following the latest escalation of tensions between Israel and Iran.

After the Iranian attack on Israel, he discussed multiple factors that could potentially impact crude oil prices if the situation worsens.

“What happens next will depend on the extent to which tonight’s Iranian attack on Israel triggers direct retaliation and, if that happens, how OPEC+ responds to even higher oil prices,” he wrote on X.

Apart from global trade in oil, gold and bonds, the Indian stock market may face repercussions from the Iran-Israel crisis. A significant escalation in tensions could lead to panic selling and volatility in global stock markets, noted Santosh Meena, head of research at Swastika Investmart Ltd.

“This week promises to be crucial for the market as new concerns over a potential conflict between Iran and Israel emerge. Any significant escalation in tensions could trigger panic selling and volatility in global stock markets. The market will also closely monitor the movement of crude oil prices, which are often impacted by geopolitical events,” Meena was quoted as saying by PTI.