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Markets, cautious about the US-Iran conflict 2:41
(CNN Business) - Global investors are seeking safe haven assets while continuing the consequences of the death of Iran's chief general, Qasem Soleimani, in a US attack.
The latest: Iran said over the weekend that it would abandon restrictions on uranium enrichment under the nuclear agreement negotiated by the Obama administration, and the Iraqi parliament voted to expel US troops. President Donald Trump said his administration has identified 52 Iranian sites, including places of cultural importance, to attack if Iran retaliates.
The situation is pressing global investors to sell shares, while Brent crude, the global benchmark for oil prices, reached $ 70 a barrel on Monday. "The market is valuing an event like the one in Iraq that sees a significant supply disruption" as foreign companies attract their staff, said Anish Kapadia, Palissy Advisors energy director.
Traditional safe bets, meanwhile, have skyrocketed in popularity: the Japanese yen reached its strongest level against the US dollar since October, and gold traded near US $ 1,577 per ounce, its highest level in almost seven years .
Goldman Sachs said Monday in a note to customers that it maintains its three-month forecast for gold to reach $ 1,600 an ounce, but that prices could rise even more "if geopolitical tensions worsen." The investment bank believes that oil prices would fall again "in the absence of a major supply disruption."
On the radar: Saudi Aramco shares have fallen to almost 34 rials (US $ 9.06), their lowest point since the company's public offering in December, amid concerns that Iran may target infrastructure Oil company in the country. The United States blamed Iran for a missile attack against Saudi Arabia in September that briefly eliminated approximately half of the kingdom's oil production.
Local and regional support for Aramco's actions is likely to be maintained, Hasnain Malik, head of capital strategy at Tellimer, an investment bank focused on developing markets, told me. But the murder of Soleimani, along with the attacks on Aramco's facilities last year, "lead us to unknown geopolitical risks" that will probably keep foreign investors away, he said.
Gold Oil Qasem Soleimanitension
