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
upward trend is expected only if the conflict escalates.
Investors are buying gold in hopes of protecting their savings, in this case, out of fear of a decline in the Israeli shekel. Since October 7, 2023, the shekel has already fallen by more than 3% against the US dollar.
Stocks of companies producing weapons
War could lead to increased demand for weapons and ammunition, which traditionally increases the share price of arms companies.
Military spending may increase on both the Israeli and Palestinian sides, and countries bordering the conflict zone may also begin purchasing weapons.
Agricultural products
Israel is a major exporter of agricultural products, including fruits, vegetables and dairy products.
A prolonged conflict will lead to higher prices for these products if supplies are disrupted. This will negatively impact food security in some countries.
Diamonds, fertilizers and medicines
Medicines, fertilizers, and diamonds are traditional Israeli exports. The war between Israel and Palestine is driving up prices for these goods.
If key production is shut down, this will undoubtedly lead to shortages and increased prices for certain goods. Therefore, if you regularly use Israeli-produced medications, it's best to stock up on supplies in advance.
The Middle East plays a vital 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, difficulties in the supply of energy resources are possible, which will lead to an even greater increase in the prices of 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 normal.
