{"id":162862,"date":"2020-01-06T07:15:56","date_gmt":"2020-01-06T12:15:56","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=162862"},"modified":"2020-01-06T07:01:56","modified_gmt":"2020-01-06T12:01:56","slug":"oil-and-gold-surge-as-investors-await-irans-retaliation","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/01\/oil-and-gold-surge-as-investors-await-irans-retaliation\/","title":{"rendered":"Oil and gold surge as investors await Iran\u2019s retaliation"},"content":{"rendered":"<div id=\"inves-3280159066\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">January 6, 2020<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p><strong>By Hussein Sayed, Chief Market Strategist (Gulf &amp; MENA), <a href=\"http:\/\/countingpips.com\/contributors\/contributor-profile-forextime\/\">ForexTime<\/a><\/strong><\/p>\n<div class=\"article-body\">\n<div class=\"field-body\">\n<div class=\"field-items\">\n<div class=\"field-item even\">\n<ul>\n<li><em>Oil trading above $70 on fears of supply disruption<\/em><\/li>\n<li><em>Gold approaching $1,600 as investors flee to safe havens<\/em><\/li>\n<li><em>Equities across the globe to trade in the red on Monday<\/em><\/li>\n<\/ul>\n<p>2020 was supposed to be the year where the global economy bounces back to life after the US and China trade tensions thawed and investors got more clarity around Brexit. Events over the last week have undoubtedly put this outlook at risk. The US killing of a top Iranian military commander in Iraq is not likely to stop a war as President Trump claims, instead this act could set off new conflicts in the Middle East that may have global consequences.<\/p>\n<p>Over the weekend, Iraq\u2019s parliament voted to expel US troops, Iran announced it will no longer adhere to the 2015 nuclear deal limits and three Americans were killed in Kenya in an attack on a military base by a jihadist group. While no one knows what will happen next, investors have pushed oil above $70, up $4 since the conflict started, and gold has surged to its highest levels in more than six years.<\/p>\n<p>In September, a drone attack on Saudi Arabia\u2019s Abqaiq crude-processing plant sent Brent prices 20% higher, but those gains were rapidly reversed as production was quickly restored and markets saw it as a short-term risk event. In the current environment, it\u2019s hard to tell whether we\u2019ll see a larger disruption in oil supplies that could send prices much higher.<\/p>\n<p>Interestingly, we note some investors are buying call options near $100 to insure or profit from massive price spikes. They are predicting that Iran will target shipping in the Strait of Hormuz, which is responsible for a fifth of the world\u2019s oil supply flow. If this strait is blocked, even for a short period, it will lead to prices skyrocketing. At $70-$80 a barrel, the global economy is not likely to feel much impact from this rise in prices, but as we get closer to $100 there will be severe consequences, which would trigger steep selloffs in equity markets.<\/p>\n<p>Another asset benefiting from escalating Iran-US tensions is gold. The yellow metal has breached last year\u2019s high and resistance level of $1,557 and looks to be heading towards the psychological level of $1,600. In times of political and market uncertainty, there is no better alternative to buying gold and despite looking overbought on the charts, the rally will continue as long as uncertainty stays high.<\/p>\n<p>Investors will remain on the defensive today and expect equities in Europe and the US to follow Asian markets lower as everyone now awaits a possible retaliatory response by Iran. This may not be an immediate one, but rather a protracted event which investors need to carefully calculate when determining their portfolio\u2019s risk.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<p><em><strong>Disclaimer: <\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n<\/div>\n<hr \/>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-54242 alignleft\" src=\"https:\/\/www.countingpips.com\/articles-analysis\/wp-content\/uploads\/2014\/07\/Forex-Time-Logo.png\" alt=\"Forex-Time-Logo\" width=\"262\" height=\"90\" \/><strong>Article by <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.countingpips.com\/contributors\/contributor-profile-forextime\/\">ForexTime<\/a><\/span><\/strong><\/p>\n<p><strong>ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 <a href=\"http:\/\/www.forextime.com\" target=\"_blank\" rel=\"noopener noreferrer\">www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Hussein Sayed, Chief Market Strategist (Gulf &amp; MENA), ForexTime Oil trading above $70 on fears of supply disruption Gold approaching $1,600 as investors flee to safe havens Equities across the globe to trade in the red on Monday 2020 was supposed to be the year where the global economy bounces back to life after [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-162862","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/162862","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=162862"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/162862\/revisions"}],"predecessor-version":[{"id":162869,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/162862\/revisions\/162869"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=162862"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=162862"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=162862"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}