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Current financial markets: Investors unsettled by escalation in the Middle East conflict
Fear of escalation in the Middle East is fueling uncertainty on the stock markets. Investors are fleeing into safe assets like gold and dollars. Stock markets are reacting with concern to the escalation in the conflict. Financial markets react nervously.
Current financial markets: Investors unsettled by escalation in the Middle East conflict
The financial markets reacted with great concern on Friday to the increasing tension in the Middle East conflict. Investors sold risky securities such as stocks, driving the price of gold to a record high. Experts described this behavior as “flight to safety.” The German stock index Dax opened with a decline of 1.1 percent, reaching its lowest level since the end of February. The DAX has lost around 5 percent since its peak in March, but was able to reduce the loss to less than 0.7 percent by midday.
Gold once again proved its position as a crisis currency as investors paid over $2,400 for a troy ounce for the first time on Friday. Oil prices also rose as conflicts in the Middle East could threaten oil supplies. Iran, a major oil producer, has been at the center of the recent disputes. Israel's attacks on Isfahan, a city with many of Iran's military facilities, further fueled stock market reactions.
Experts recommend the US dollar and the Swiss franc as safe currencies during this time, as they are traditionally considered safe investments. Other currencies such as the Turkish lira, the South African rand and the Mexican peso are having a difficult time due to the unstable situation on the stock exchanges. The euro was stable on Friday and was at 1.065 dollars. Growing fears of escalation in the Middle East led to a decline in Asian stock markets.
The already nervous Bitcoin investors also reacted to the increasing risk of escalation, which led to a temporary decline in the price. Despite the impending halving, the price of Bitcoin stabilized at around $65,000 on Friday after Iran's attack on Israel previously caused the price to fall from $71,000 to almost $60,000. Overall, concerns on global stock markets increased about a possible further escalation in the Middle East and the impact on financial markets worldwide.