Oil spikes after Iran strikes United States targets in Iraq - Economy

US Dollar Crude Oil Prices May Rally on US-Iran Escalation Risk

Gold price nears highest level in years as investors take fright

Iran launched a missile attack on US-led forces in Iraq in the early hours of Wednesday, followed by a "second round" of attacks against USA bases in Iraq.

President Trump also upped the ante, tweeting on Sunday that "should Iran strike any USA person or target, the United States will quickly & fully strike back, & perhaps in a disproportionate manner".

The price of Brent crude has increased by 2.5% and has reached $69.94 per barrel. Brent oil futures slid off a four-month peak hit in frenzied early trade after the Iranian attack.

Stock markets in Europe were also indicated lower.

Gold futures (GC=F) were treading water in early trading on Tuesday in London, at about $1,568 (£1,193) per ounce.

Soleimani's body was transported to his hometown of Kerman for his burial on Tuesday, after thousands of Iranians took to the streets in anger and mourning over the weekend.

Gold futures (Feb 2020) on MCX were trading above the Rs 41,000-mark touching a new record high of Rs 41,293 per 10 grams after a 1.5 percent jump.

U.S. West Texas Intermediate crude dropped 57 cents, or 0.9%, to settle at $62.70/Bbl, Kallanish Energy reports. The benchmark 10-year U.S. Treasury yield remained at 1.785% Monday morning, which is well below the 1.92% yield they held at the end of 2019.

The next historic level of resistance for the price of gold is around $1,610, which was respected consistently throughout 2011 and 2013.

"It is holding above $1,600, if there is confirmation that there are U.S. casualties, it could go higher", said Matt Simpson, a senior market analyst at Gain Capital in Singapore.

Crude briefly dipped below $60 a barrel after Trump's remarks, giving back all of the gains from last week's USA drone strike that killed a top Iranian commander.

Consultancy Eurasia Group said Iran probably would focus on USA military targets rather than energy targets.

The dollar index .DXY , tracking the unit against six major peers, rose 0.27%, with the euro EUR= down 0.32% to $1.1115.

Oil prices will "likely rise much further if Iran retaliates, either by attacking Saudi oil facilities as it did in September, or attempting to block the Strait of Hormuz, through which 20 per cent of global oil supply is transported", said Michael Pearce, senior USA economist at research group Capital Economics.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.01% at AUD 1.4556, and the Kiwi strengthening 0.11% to NZD 1.5041.

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