Today the markets have been heavily dominated by the escalation in the conflict between the United States and Iran. The US recently attacked Iranian military in Baghdad, killing their leader, Qesam Soleimani in the process. This puts the United States and Iran on the verge of war and threatens the peace of the whole region, including Iraq, where the US has had a strong presence through the years.
As a result of the unexpected geo-political conflict, safety assets have rallied. Gold climbed to four-month highs at $1,551.95, though even without the conflict in Iran, investors expected gold to increase in price in 2020. The Japanese yen is also strengthening today due to its status as a popular safety asset.
Crude oil is one of the instruments most directly affected by the conflict between the US and Iran. Over the past few months, Iran has disrupted the oil production activities of US allies in the region several times, and many expect such attacks would worsen now after Donald Trump’s provocation. Brent crude increased to $68.89, while American oil futures reached $63.48.
The stock markets all over the world are also lower today, shedding the gains they won in the beginning of the week.
Today we also await the full report from the Fed’s December policy meeting, which would show how the central bank feels about the current state of the US economy.
