Gaza ground operation triggers global commodity market volatility

[Photo by Yonhap]

The global economy has recently faced an elevated risk of uncertainty as Israel’s ground invasion of the Gaza Strip has begun. Commodity markets, particularly susceptible to geopolitical instability, are experiencing early turmoil. Gold prices have surged past $2,000 per ounce, a level not seen in five months, and oil price volatility has reached its highest point since Russia’s invasion of Ukraine last year.

Spot gold price, as reported by Bloomberg, reached $2006.83 per ounce as of Monday in Singapore. This marks the first time since May that it has crossed the $2,000 threshold. However, the price are hovering around the threshold as the conflict in Israel has escalated. Since Hamas’s attack on Israel on October 7, the price has increased by more than 9 percent.

While there have been concerns over a potential oil shock in the worst-case scenario, the current oil price remains below $90 per barrel. However, price volatility has already surged. Over the weekend, an oil price volatility index, which monitors the price of Brent crude over a 30-day period, reached 35.29, representing a substantial increase of over 20 points compared to the end of the previous month when it stood at 12.49. This surge in volatility was the most significant since the outset of the conflict in Ukraine in February 2022. In response, there has been a notable rise in trading activities on Wall Street, with speculators betting on oil prices exceeding $100 per barrel.