The violence in Israel is likely to boost interest in gold and other safe-haven assets as investors closely monitor developments in the Middle East to gauge the impact of geopolitical risk on markets, Reuters reported.

On Saturday, armed members of the Palestinian group Hamas entered Israel in an unprecedented attack.

Western countries, led by the United States, condemned the attack and pledged support for Israel.

Rising geopolitical risk could lead to buying of assets such as gold and the dollar and boost demand for aggressively sold U.S. Treasuries, analysts said.

“This is a good example of why people need gold in their portfolios. It’s the perfect hedge against international turbulence,” said Peter Cardillo, chief market economist at Spartan Capital Securities, who predicted the dollar would also gain.

“Whenever there is international turmoil, the dollar strengthens,” Cardillo said.

In recent weeks, markets have reacted to expectations that US interest rates will remain higher for longer.

Bond yields rose, while the U.S. dollar posted a string of gains.

Meanwhile, stocks suffered sharp losses in the third quarter but stabilized last week.

“Whether or not this will be a massive market moment depends on how long it lasts and whether others are absorbed in the conflict,” Brian Jacobsen, chief economist at Annex Wealth Management, said of the situation in Israel.

Jacobsen questioned how big the impact on oil prices would be despite Iran’s increased production.

The Hamas attack was openly approved by Iran and Hezbollah, Iran’s Lebanese allies.

“Iran’s oil production is increasing, but any progress they’ve made behind the scenes with the U.S. will be severely undermined by Iran praising Hamas’ actions,” Jacobsen said, adding that “the potential loss of production matters, but it doesn’t will be.” be awesome.”

“It will be very important to see how Saudi Arabia reacts,” Jacobsen said.

Washington tried to conclude an agreement that would normalize relations between Israel and Saudi Arabia.

David Kotok, president and chief investment officer of Cumberland Advisors in Sarasota, Fla., said the situation is troubling because the U.S. is weakened by Washington’s dysfunction.

Republicans are searching for a successor to ousted House Speaker Kevin McCarthy, and a budget showdown is brewing.

“I’m very concerned about the more explosive situations that require US resolve and the US defense capability being affected,” Kotok said.

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