Tensions in the Middle East are causing unrest in the financial markets and attracting new traders to commodities in droves. Oil in particular is suddenly in the spotlight. According to new platform data, private investors are jumping into the energy market en masse, while gold remains popular as a safe haven.
The sudden shift shows how quickly investors react when geopolitical risks mount and potential oil supply disruptions loom.
Oil trade skyrockets due to fear of supply disruption
According to figures from trading platform Capital.com, oil trading volume increased explosively at the beginning of this week. On Monday the volume was more than six times higher than normal. The number of active oil traders increased by 276 percent in one day.
In addition, new investors flocked to the market en masse. The number of new traders who opened an oil position increased by more than 1,200 percent.
At the same time, the mood among investors changed. While just over half of the positions were bullish on Friday, that share rose to about 75 percent on Monday. Many traders are clearly counting on rising oil prices due to possible disruptions in supplies from the Middle East.
As a result, oil quickly grew to become the second most traded instrument on the platform, surpassing several major currency pairs and stock indices.
Gold benefits from flight to safe havens
In addition to oil, precious metals are also seeing strong capital inflows. According to the data, trading volume in gold increased by more than one hundred percent in a short time.
The number of active gold traders increased by approximately 61 percent. About two-thirds of positions are long, indicating strong demand for protection against geopolitical uncertainty.
According to market analyst Kyle Rodda of Capital.com, this is no surprise.
“Precious metals, and especially gold, are almost always popular with retail investors. But the current uncertainty surrounding geopolitics, trade and economic policy has further increased that interest.”
According to Rodda, the biggest shift is currently visible in the energy market. Investors are reconsidering their positions due to the volatility caused by the conflict in the Middle East.
The crypto market has also been hit by conflict
It is not only raw materials that are responding to the tensions. In Iran, the crypto market also took a big hit after the government introduced strict internet restrictions.
Research firm TRM Labs reports that internet connectivity in the country temporarily dropped by about 99 percent. As a result, many traders could hardly gain access to crypto exchanges.
Between late February and early March, trading volume on local platforms plummeted by approximately eighty percent.
Even major exchanges ran into problems. The Iranian stock exchange Wallex reported an outage at a data center that is also used by the major platform Nobitex. According to analysts, this shows how vulnerable the infrastructure of crypto platforms can be when internet access is restricted.
The tensions also have an impact on the financial sector in the region. Dubai has been an important hub for international brokers and crypto companies for years. However, recent Iranian missile attacks near major commercial areas have raised questions about the stability of that position.
For now, investors are mainly responding by shifting capital to markets that directly benefit from geopolitical unrest, such as oil and gold.
Source: https://newsbit.nl/oliehandel-explodeert-door-iran-spanning-retailbeleggers-storten-zich-massaal-op-markt/
