Gold is heading towards a record high, as investors seek out safe-haven assets. The spot price of gold has jumped 1% to $3,418 per ounce, towards the all-time peak of $3,500/oz set in April. Derren Nathan, head of equity research at Hargreaves Lansdown, says: Safe haven assets are back in demand with gold prices at seven-week highs at over $3,400 per ounce. Diminishing risk appetite, as well as the potential for lower interest rates on cash paint, a positive picture for investors in the yellow metal. European shares are set to open sharply lower in under 30 minutes time. Reuters has the details: Euro STOXX 50 futures, which track blue-chip euro zone stocks, dropped 1.4%, with contracts on the German and French benchmarks each down over 1%. Futures on Britain’s oil- heavy FTSE fell 0.4%. Shares across Asia-Pacific stock markets fell sharply after Israel launched its military operation at Iran’s nuclear facilities. Japan’s Nikkei dropped 1%, South Korea’s KOSPI has lost 0.85% and China’s CSI300 is down 0.66%. Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Stock markets are sliding, and the oil price has surged, after Israel launched an attack on Iran overnight, targeting nuclear facilities, military commanders and Iranian scientists. The attacks, a major escalation of tensions in the Middle East, have sent investors dashing into safe-haven assets, fearing it could spiral into a wider conflict. Brent crude oil surged by over 10% when news of the attacks broke, reaching its highest level since January. It’s now up 8% at $73.52 per barrel, which would be the biggest daily rise since 2022. Oil was driven higher by worries that supplies from the region could be disrupted, if the conflict escalates. Ipek Ozkardeskaya, senior analyst at Swissquote Bank, suggests that oil could push higher, perhaps to $90–$100 per barrel, in that scenario, saying: Oil jumped as much as 13% after Israel launched a major and unprecedented attack on Iran, targeting nuclear and military facilities. While the news isn’t entirely surprising—there had been reports of Israel preparing action and the U.S. ordered Americans to leave the region earlier this week—the Israeli strikes could mark the beginning of wider regional tensions. If Israel continues operations beyond its borders, the Middle East could heat up fast. Latest: Israel says Iran’s nuclear program poses an existential threat and vows that its operation will continue for as long as necessary. Iran has already launched hundreds of drones in retaliation and could go further. But how much further? Benjamin Netanyahu has indicated that the Israeli operation will take “many days”, and warned that “Israeli citizens may have to remain in sheltered areas for lengthy periods of time.” The agenda 3pm BST: US consumer confidence report
Author: Graeme Wearden