When a conflict escalates, financial markets respond within minutes. That reaction is not just panic or speculation – it is a kind of collective judgement about what might happen next.
The conflict between the US, Israel and Iran, which started on Saturday, triggered a sharp jump in oil prices when Asian markets opened on Monday (rising by as much as 13% amid fears of supply disruption). Major Gulf indices fell steeply, and in some cases trading was suspended amid volatility.
At the same time, investors moved into so-called “safe-haven” assets. Gold prices rose, and demand increased for traditionally defensive currencies such as the US dollar and Swiss franc.
