Oil rises amid Middle East tensions while gold stabilizes near two-day low

Oil prices rose amid escalating tensions in the Middle East, while gold stabilized near a two-day low, according to the "Commodity Corner" newsletter published by "Moneycontrol" on October 14.

The rise in crude reflects the return of the geopolitical risk premium to energy prices, as traders drive oil prices higher in anticipation of potential supply disruptions from a region containing key shipping lanes.

In contrast, gold was dominated by caution following a streak of losses, remaining close to its two-day lows and gaining little from the risk of tensions, reflecting the dominance of monetary factors over the metal's movements. The newsletter noted that the two trends reflect different drivers: oil is influenced by geopolitical risks, while gold is subject to monetary factors.

Observers describe this divergence as a real test for Arab investors between safe-haven demand and the pressure of interest rates and the dollar, as gold remaining without gains limits its tactical appeal even as geopolitical risks intensify.

What do these terms mean?

Commodities: Basic materials traded on global markets such as oil, gold, and grains, serving as an indicator of economic health.

Geopolitical risk premium: The increase in an asset's price due to fears of political or military tensions that could disrupt supply.

Safe haven: An asset that investors turn to in order to protect their capital during times of tension, with gold being among the most prominent examples.