Despite recent tensions in the Middle East, gold and oil prices are beginning to ease on Thursday. President Joe Biden's return from his trip to Israel has provided some reassurance, as he reiterated his support for the country and secured a humanitarian aid deal for the Gaza strip via Egypt.
Furthermore, both Biden and Israel have denied any Israeli involvement in the explosion at a hospital in Gaza on Wednesday. Yet, protests have erupted in Jordan, Turkey, and Iran against Israel.
Initially, there were concerns that this incident could escalate the conflict, potentially involving major oil-producing nations such as Iran or Saudi Arabia. Consequently, investors flocked to gold as a safe-haven asset.
Currently, gold is slightly down by 0.3% at $1962.50 per ounce. However, it remains more than 4% higher than last week and 20% higher than the same time last year. In fact, gold prices are near their highest point since August and have outperformed the S&P 500 in terms of annual returns.
Meanwhile, West Texas Intermediate, which serves as the U.S. oil standard, has dipped 0.3% to $88.08 per barrel. Similarly, Brent crude, the international benchmark, has fallen by 0.6% to $90.98 per barrel.
While there seems to be a slight reduction in tension, the situation still remains delicate and there is a risk of further escalation. Recent reports state that Boeing is hastening the delivery of conversion kits that transform unguided bombs into precision guided ones.