Oil, Gold Markets Swing From War Fears To Calm Over Israel-Iran Tensions: What Analysts Expect Next
Portfolio Pulse from Piero Cingari
Following Iran's drone and missile attack on Israel, market sentiment shifted from war fears to calm, with President Biden urging Israel to avoid retaliation. The CBOE Volatility Index dropped, indicating reduced market anxiety. Equities rallied, with SPY and EZU experiencing gains. Oil and gold prices fell, reflecting diminished concerns over Middle East tensions. Analysts suggest the market's reaction is due to no significant casualties and a reduced likelihood of escalation. However, potential Israeli retaliation could impact energy markets, with oil prices potentially surging if the Strait of Hormuz is disrupted.
April 15, 2024 | 3:28 pm
News sentiment analysis
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NEGATIVE IMPACT
SPDR Gold Trust saw a decline of 0.5%, indicating a lack of rush to gold as a safe haven amid current geopolitical tensions.
The decline in GLD reflects a reduced investor inclination towards gold as a safe haven, suggesting a short-term bearish outlook for gold prices.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 85
NEGATIVE IMPACT
United States Oil Fund declined by 0.9%, reflecting investor expectations of no significant disruptions to oil supply and demand.
The decline in USO suggests that investors are not factoring in significant disruptions to oil supply, indicating a short-term bearish outlook for oil prices.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
iShares MSCI Eurozone ETF rallied 1%, benefiting from the positive shift in market sentiment and reduced geopolitical risks.
The rally in EZU is a direct result of improved market sentiment and reduced geopolitical risks, indicating a short-term positive impact on European equities.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 85
POSITIVE IMPACT
SPDR S&P 500 ETF Trust rose 0.5% amid easing concerns over Middle East tensions, indicating a positive market response.
The gain in SPY reflects investor relief and a positive market response to the reduced likelihood of escalation in the Middle East, suggesting a short-term bullish outlook.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 90
POSITIVE IMPACT
The CBOE Volatility Index dropped nearly 6%, indicating a decrease in market anxiety following the Iran-Israel tensions.
The drop in VIX reflects a significant decrease in market anxiety and fear, likely leading to a short-term positive impact on investor sentiment and potentially stabilizing stock markets.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80