How the war between Israel and Palestine will affect global financial and commodity markets
The conflict between Israel and Palestine, which began on October 7, 2023, has already had a negative impact on global financial and commodity markets.
The current conflict taking place in the heart of the Middle East could have significant consequences for global financial and commodity markets.
The region is a critical node in global economic and energy networks, and any long-term tension or instability could cause significant fluctuations at the global level.
Markets directly related to the conflict area will react first, for example, Israel is the largest supplier of diamonds, medicines, agricultural products and fertilizers.
Gold prices
Gold is a traditional safe-haven asset in times of uncertainty. upward trend should be expected only in the event of an escalation of the conflict.
Investors buy gold in hopes of protecting their savings, in our case fearing a fall in the value of the Israeli shekel. After October 7, 2023, the shekel has already fallen against the US dollar by more than 3%.
Shares of weapons companies
War can lead to an increase in demand for weapons and ammunition, which traditionally increases the price of shares of weapons companies.
Military spending may increase, both on the part of Israel and on the part of Palestine, and countries bordering the conflict zone will also begin to purchase weapons.
Agricultural products
Israel is a major exporter of agricultural products, including fruits, vegetables and dairy products.
Prolongation of the conflict will lead to an increase in prices for these products if their supplies are disrupted. This fact will have a negative impact on food security in some countries.
Diamonds, fertilizers and medicines
Medicines, fertilizers and diamonds are Israel's traditional exports. The war between Israel and Palestine is driving up prices for these goods.
If key production is stopped, this will definitely cause shortages and an increase in the cost of some goods. Therefore, if you regularly use medications produced in Israel, it is better to take care of creating a certain supply in advance.
The Middle East plays an important role in the global energy market. The conflict between Israel and Palestine has caused instability in the region, which in turn has already led to fluctuations in oil and gas prices.
In the event of an escalation of the conflict, there may be difficulties in the supply of energy resources, which will entail an even greater increase in prices for these goods on world exchanges.
When assessing possible scenarios and their likelihood, it is important to consider many factors, including the political environment, international relations and the current economic situation.
If the conflict continues or intensifies, it could lead to long-term instability and potentially serious consequences for the global economy.
However, if the parties can reach a long-term political solution, it will help stabilize the region and return the situation to its previous course.