Seize Opportunity during Middle East Tension

On the fifth day after Suleimani's death, Iran's "revenge" operation began. The conflict between the United States and Iran has escalated again.

According to Iranian media reports, at about 1:30 am local time on the 8th, Iran fired tens of surface-to-surface missiles at Ain Assad air base in western Iraq, where US forces are stationed.

On Wednesday morning, President Trump will deliver a national speech regarding the attack.

US Department of Defense spokesman Jonathan Hoffman said in a statement that the United States is conducting damage assessment and will take necessary measures to protect US forces in the area.

Press TV, an English-language news station operated by the Iranian government, reported that the Islamic Revolutionary Guard has confirmed the attack and said more details of the operation will be announced later. Press TV said that Iran has repeatedly vowed to avenge Major General Suleimani who died in the United States on the 3rd in a precision strike, so the attack was completely expected. Analysis believes that Iran's potential retaliation targets include US military bases in the Middle East. According to the latest CNN news, Iran has threatened that if the United States responds to a missile attack, it will launch an attack in the United States.

Right after the attack, financial markets fluctuate again!

Cannon rang, gold price soared. As soon as Iran's revenge action was released, global financial market fluctuates dramatically—gold, crude oil and other risk-averse varieties soar up, and the market's hedge sentiments was strong.

Gold market: hedge sentiments stimulate gold prices to rise

After experiencing tensions between the US and Iran, gold performed strongly. From December 30, 2019 to January 4, 2020, gold rose to a maximum of 1,553 US dollars, an increase of 2.73%, the largest weekly increase since mid-August 2019. Early today, the New York Gold reported $ 1608.90 per ounce, an increase of $ 34.5 per ounce, a sharp rise of 2.19%. The London gold price was 1606.37 US dollars per ounce, up 2.02%.

At present, the uncertainty of the conflict between the United States and Iran is increasing, and the consequences it would bring are still difficult to tell. Such uncertainty is the biggest problem faced by market investors.

In response to this uncertainty, there are usually several options, including choosing assets with relatively low risk for hedging operations, which is why gold has become the choice for many investors.

However, as long as many investors buy any asset, its price will rise accordingly. If the price rises to a certain level before investing, the risk of the asset itself may also increase. Because after it reaches a certain level, the possibility of falling is greater, which is also an issue that investors need to consider when investing.

If tensions continue, it may have a significant impact on the dollar and gold price. On the one hand, the US dollar index is lowered from a hedging perspective and the gold price is raised; on the other hand, the inflation raises the US and global inflation rates, reduces the US and global real interest rates, and further drives up the price of gold.

The financial market is completely in panic-the price of gold soars above 1600 and the price of oil soars by more than 4%!

The price of oil also soared in the morning. WTI continued to rise, and the increase within the day expanded to more than 4%, hitting a new high since April last year.

For this US-Iran conflict, most analysts believe that gold is more suitable for risk hedging than crude oil. Most analysts are quite optimistic about the trend of gold in 2020 and recommend long-term holding. However, for the trend of crude oil, it is considered that the oil market will be greatly affected by geopolitics in view of the volatility of oil prices. However, in addition to the situation in the Middle East, oil prices are also affected by various factors such as US shale oil production.

Height Capital Markets strategist Clayton Allen previously warned investors, "Do not regard this as a one-off military operation where the news craze will fade, but as a major event that will greatly change the situation in the Middle East and affect the relationship between the United States and Iran. "

Above is my analysis for today. #MiddleEastTensions#  #Goldboom#  #Todayanalysis#  #WTI#  #CrudeOil#  #gold#