The tension between Iran and the United States has intensified in recent days, significantly impacting oil and gold prices. Analyses suggest that these developments may remind one of trading patterns before the last two wars.
Oil and Gold on an Upward Path
Following recent threats from the U.S. President, the price of Brent crude oil has risen from $106.06 to around $110 in two days, representing an increase of nearly 4 percent. In past wars, oil has always been one of the first markets to react to the dangers of war, witnessing price increases. For example, in the two days before the 12-day war, the price of Brent oil rose from $66.87 to $69.36, and during the 40-day war, the price increased from $70.85 to $72.48.
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Similar signs are observed in the gold market as well. The price of gold per ounce has risen from $4105.7 to $4165.5 in the last two days, indicating a 1.5 percent increase. This follows a similar price rise recorded before the last two wars.
Stock Market Status and S&P 500 Index
In contrast, the stock market presents a more complex situation. The S&P 500 index has decreased by about 0.8 percent in the last two trading days. This follows a nearly one percent drop in the lead-up to the 40-day war. However, just before the 12-day war, this index had experienced a 0.1 percent increase. In addition to concerns about war, other factors such as investors' doubts about the future of artificial intelligence companies and worries about rising interest rates have contributed to this decline.
In the last two trading days, the overall index of the Tehran Stock Exchange has also fallen by about 2.3 percent, a sharper decline than in the two previous periods before past wars. In contrast, in the last two days before the 12-day war, the overall index had only decreased by 0.2 percent.
Increased War Risk and Tension Index
Analyses indicate an increase in the risk of war between Iran and the United States. The Tension Index from the Iran Chamber of Commerce Research Center, which examines fluctuations in financial markets, shows a significant increase. According to data, this index saw a substantial rise on Friday, October 16, 2023, indicating an increase in the level of uncertainty in the markets.
However, the Taco Index, which assesses the likelihood of Trump retreating from his hardline positions, has risen to over 4 units, indicating that the cost of continuing tensions for the U.S. government is increasing. Currently, there are two opposing forces in the markets: concerns about escalating conflict causing volatility and the economic pressure from this turmoil that may lead to a reduction in tensions.
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