Gold prices shine to the highest level of $1588.65 an ounce since 2013 on intensifying Middle East tensions.
Brent oil jumped above $70 and WTI above $64 a barrel, up about 6% since Friday early morning on supply fear.
Tension escalated after the United States killed a top Iranian commander in an airstrike on Baghdad airport.
The Iraqi government on Sunday called on American and other foreign troops to leave Iraq, heightening concerns of a widening Middle East conflict that may disrupt oil supplies from the region.
Iraq is the second-largest producer in the OPEC, pumping 4.65mbpd. Its immediate neighbors in the region are Saudi Arabia, Kuwait, and Iran, which together produce about 15mbpd. Most of their exports leave the Persian Gulf through the Strait of Hormuz, a narrow waterway that Iran has repeatedly threatened to shut down if there’s a war.
U.S. President Donald Trump on Sunday threatened "major retaliation" against Iran if they will retaliate for the killing.
Iran said on Sunday it no longer considers itself bound by the 2015 nuclear deal negotiated with the U.S. and other world powers in the fallout from the killing of General Qassem Soleimani.
If tensions escalated further from here, Brent Crude has the potential to test $85 and WTI will reach $75.
Moreover, gold will continue its solid gaining story and will try to fetch our 2020’s target of $1650 anytime soon.
India rupee will continue weakening streaks and, will go to 72.6/73.4 a dollar. Worth quoting is that the market will remain full of drama with heightening volatility, hence, a well-planned trade decision needs to be taken to tame the risk for capturing the likely sparking rally.