After Iranian officials seemed to deny claims of an Israeli attack, oil and gold prices have calmed.
The global benchmark, Brent crude, dropped after momentarily rising to more than $90 a barrel due to information about an attack.
Before falling below $2,400 an ounce, gold was on the verge of setting a record for a short while.
There are worries that the Middle East’s escalating war may cut off oil supply.
Investors were keenly observing Israel’s response to Iran’s direct strike over the weekend with drones and missiles.
At first, oil prices had increased by as much as 3.5%. However, after Iranian state media reported that there was “no damage” in the region of Isfahan, where there had been allegations of explosions, Brent dropped back to about $87 per barrel.
Steep and steady increases in prices put inflation at danger.Countries rely heavily on the commodity.The past few years have seen a significant increase in the cost of petrol and energy around the world.
Response on Oil and Gold prices’ fluctuations
Randeep Somel, fund manager at M&G Investment Management: “The concern for markets would mainly be the inflationary one, that this would actually add to inflation.”
Even though inflation in the UK has slowed, it is still higher than the Bank of England’s 2% target, and some experts predict that interest rates won’t be lowered until the summer or later in the year.
“In the UK, the inflation rates is still around 3.2% – still someway off the target – and it is becoming a bit of a concern for policy makers,” stated Mr. Somel.
“It’s encouraging that things haven’t gotten worse and that the market disruption should only last temporarily.”
