Middle East Tensions Drive Oil and Gold Prices Up

Oil prices briefly jumped over 3% after Israel conducted a limited strike on Iran, leading to fears of an expanding war in the Middle East. Safe haven assets like spot gold and the Japanese yen also rose. Israel's attack on Iran comes after Iran's retaliation for an Israeli strike on its embassy compound in Damascus, Syria. The escalating tensions pose risks to oil markets, with potential disruptions to oil exports from the Arabian Gulf and the key chokepoint of the Strait of Hormuz. Despite the direct strike, Iran's response suggests that the escalatory pressure will likely be contained for now.