Israel-Iran conflict triggers major market moves as oil and gold surge

​​​Geopolitical tensions escalate as Israel strikes Iran

​Israel launched a comprehensive military operation targeting Iranian nuclear facilities, missile production sites and senior commanders. The strikes represent a significant escalation in regional tensions, with Iran's Supreme Leader promising "harsh punishment" in response.

​Iranian media confirmed the death of Revolutionary Guards Commander Hossein Salami alongside six nuclear scientists. The scope and scale of the attacks have heightened concerns about broader Middle East conflict.

​The United States distanced itself from the operation, describing Israel's actions as unilateral. American officials have urged Iran not to target US interests in any retaliation.

​Oil markets surge on supply disruption fears

​Crude oil prices experienced their largest single-day jump since 2022, with Brent crude oil surging up to 14% intraday to reach $78.50. WTI crude oil also spiked, hitting $77.62 as traders priced in potential supply disruptions.

​The dramatic price movement reflects market concerns about the Strait of Hormuz, a critical shipping route that handles approximately 20% of global oil consumption. Any disruption to this vital waterway could significantly impact global energy supplies.

​Gold approaches record highs amid safe-haven demand

Gold​ saw significant activity as the precious metal rose to $3,444.00 per ounce, just $56.00 below its all-time high. The surge reflects classic flight-to-safety behaviour during periods of geopolitical uncertainty.

​Global equities retreat as risk appetite wanes

​Stock markets worldwide suffered sharp declines as investors moved away from risk assets. US futures dropped approximately 1.6%, while European markets saw the STOXX 50 fall 1.7%.

​Asian markets also experienced selling pressure, with the Nikkei 225 declining 1.1%. The Hang Seng and KOSPI both fell around 1% as regional tensions weighed on sentiment.

​Stocks have come a long way off their lows since mid-April, as tariff concerns have eased, which left them vulnerable to at least a short-term correction. Bullish momentum has been flagging in recent days despite good news on US inflation. While US futures have stabilised in the hours since the attack, much will depend on the magnitude of the Iranian response and further Israeli action.

​Currency markets show clear safe-haven flows

​The US dollar index strengthened 0.6% to 98.28, with the greenback gaining most against risk-linked currencies. The Australian dollar and New Zealand dollar bore the brunt of the dollar's strength.

​Traditional safe-haven currencies initially rallied before flattening by midday. The Swiss franc and Japanese yen showed early gains but failed to sustain momentum throughout the session.

​Both the euro and sterling slipped approximately 0.6% after reaching multi-month highs earlier in the trading day. The reversals highlighted how quickly sentiment can shift during geopolitical crises.

​Bond markets reflect flight to quality

​US Treasury bonds rallied as investors sought safe-haven assets. The 10-year Treasury yield fell to a one-month low of 4.31%, reflecting strong demand for government debt.

​Cryptocurrency markets face selling pressure

​Digital assets struggled amid the risk-off environment, with Bitcoin declining 1.5% and Ether falling 4.7%. The moves highlight cryptocurrencies' continued correlation with risk assets during periods of stress.

​Market outlook amid ongoing tensions

​Further escalation could drive additional gains in oil and gold while maintaining pressure on equity markets. Inflation risks may increase if energy prices remain elevated for extended periods.