Prices for both oil and gold climbed on Wednesday after a blast at a hospital in Gaza City killed hundreds of people.
Both Israel and Hamas said the other side was to blame for the explosion in which Palestinian officials say at least 500 people were killed. President Joe Biden traveled to Israel to meet with Prime Minister Benjamin Netanyahu. He, however, postponed a trip to Jordan to attend a regional summit on Gaza. The president said his national security team is investigating the explosion.
“Based on what I’ve seen, it appears as though it was done by the other team—not you,” Biden told Netanyahu. He also noted that others aren’t sure who is responsible which means “we’ve got to overcome a lot of things.”
Violence in the Middle East is almost always disruptive to the oil market because of the complex web of allegiances of oil-roducing countries in the region. While there isn’t much oil in Israel or Jordan, the risk is that the war widens to involve Iran, which ships millions of barrels a day. Other states in the region such as Saudi Arabia are among the biggest crude producers in the world.
On Wednesday,
West Texas Intermediate,
the U.S. standard, was trading 1.1% higher at $87.64 a barrel.
Brent crude,
the international standard, was 1.2% higher at $90.96. Both contracts are up more than 6% over the past week.
Gold
added 0.9% in early trading and has gained more than 3% in the past week. The front-month futures contract for gold is up 4.8% this month and is on track for its its largest one-month gain since March.
Gold may be getting preference over Treasuries as a haven. While U.S. government bonds are the traditional target of a flight to safely, bumper retail sales figures and concerns about inflation as oil prices move higher are pushing up yields.
Write to Brian Swint at brian.swint@barrons.com
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