Gift Nifty futures tanked as much as 2% on Thursday after a fresh escalation between US and Iran. This is an indication of the lower open or weak trade for the Indian stock market on Friday. Indian stock markets have been shut for trading today on account of Eid-ul-Adha.
In latest reports coming in at the time of releasing this copy, Iran's Islamic Revolutionary Guard Corps or the IRGC has stated that they have targeted an American air base, this comes after fresh US strikes on Iran. While the IRGC did not mention where the American air base was, Kuwait mentioned it had 'intercepted a hostile missile and drone threats.' The fresh strikes have raised concerns and doubts over the fragile nature of the ceasefire that was being discussed.
This latest escalation has taken place after the US earlier stated they had made strikes for 'self-defence'.
In multiple statements, US mentioned how certain operations were conducted to protect American troops and ensure the safety of commercial shipping routes in the region.
Brent Crude have gained over 2.5 percent following the fresh strikes. Analysts are eyeing this uncertainty and signal a cautious approach even as policymakers weigh tighter monetary frameworks in response to inflation risks.
Global gold rates also declined to a two-month low on Thursday after uncertainty over the trajectory of the US-Iran war boosted the dollar and spiked oil rates.
While geopolitical conflicts and times of uncertainty are usually times when the demand for gold (which is considered a safe-haven) spikes, the current situation investors believe is far more complicated than meets the eye. They feel that rising oil rates could mean oil prices will remain high for a longer period and add to already existing inflation and supply concerns for the long-term and shift the focus away from the near-term possibility of the situation easing now.
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