A U.S. warship intercepts missiles from Yemen, increasing tensions in the Middle East
In the wake of Hamas' recent attack on Israel, a U.S. warship intercepted missiles coming from Yemen on Thursday. This development has further heightened tensions in the already-fragile Middle East region. Investors are growing concerned that a wider conflict may disrupt oil supplies, considering Iran and Saudi Arabia's significant roles as major global producers. Adding to the uncertainty, traders may turn to safe-haven assets like gold for protection.
Gold and Oil Prices React to Yemen Missile Interception
In response to the missile interceptions in Yemen, both gold and oil prices experienced a rise. Notably, this occurred one day after President Joe Biden returned from his trip to Israel, where he reiterated U.S. support for the country. Additionally, President Biden argued that the rocket that struck near a hospital in Gaza earlier that week probably did not originate from Israel.
Oil Prices Surge Past $90, Gold Prices Also Rise
Oil prices have surpassed the $90 mark, with West Texas Intermediate, the U.S. benchmark, showing a 1.2% increase to reach $90.40 per barrel. Notably, this marks a gain of over 3% within the past week. Furthermore, Brent crude, the international standard, has also seen a boost of 0.9% and is now priced at $93.18 per barrel. In tandem with these movements, gold prices have risen by 0.7% on Friday, reaching $1,993.30 per ounce.
Additional Developments in the Oil Market
Aside from the rising tensions in the Middle East, there are other factors affecting oil prices. The U.S. government has announced its decision to purchase oil for the Strategic Petroleum Reserve, thereby increasing demand for the commodity. Conversely, a new agreement between the U.S. and Venezuela, which allows for more exports in exchange for political reform, could eventually contribute to global supply.
Continued Uncertainty Surrounding Hamas-Israel Conflict
Despite the passage of time, fears of escalation in the Hamas-Israel conflict are unlikely to diminish over the weekend. As a result, both oil and gold prices will likely remain volatile as investors closely monitor the situation.
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