BEIJING, Feb. 28 – Global prices of gold, silver and crude oil surged across the board on the evening of Feb. 27 as geopolitical risks in the Middle East escalated sharply, fueling a significant rise in risk aversion across markets.
In the precious metals sector, spot silver breached the $93 per ounce mark, surging more than 5%. The 2x leveraged long silver ETF jumped over 10% intraday. Spot gold held steady above $5,230 per ounce, with its 2x leveraged long ETF rising nearly 2%.
International crude oil markets rose in tandem. As of 22:00 Beijing Time, NYMEX WTI crude futures climbed 3.88% to $67.74 per barrel, while ICE Brent crude futures gained 3.63% to $73.41 per barrel.
Meanwhile, risk assets came under downward pressure. U.S. stock futures fell across the board: Dow Jones Industrial Average futures dropped more than 1%, S&P 500 futures slipped over 0.83%, and Nasdaq 100 futures declined more than 0.95%.
Market analysts attributed the latest market volatility primarily to the sudden deterioration in the security situation in the Middle East. External security risks facing Iran have risen markedly recently, with multiple countries issuing advisories for their citizens to evacuate.
China’s Ministry of Foreign Affairs and its diplomatic missions in Iran have issued security alerts, advising Chinese nationals to avoid non-essential travel to Iran and urging those already in the country to strengthen safety precautions and leave as soon as possible. The Chinese Embassy in Israel has also issued an emergency notice, reminding Chinese citizens in Israel to closely monitor developments and enhance security measures.
In addition, governments of Canada, Australia, India, Poland, Serbia, South Korea, Sweden and other countries have all urged their citizens to leave Iran promptly. The Canadian government stated explicitly that hostilities could break out with little to no warning amid ongoing regional tensions.
Markets are closely monitoring the follow-on impact of geopolitical risks on global energy supplies and financial markets. Analysts warned that a further deterioration in the Middle East could exacerbate volatility in the global energy market and continue to drive up demand for safe-haven assets.
