Middle East conflict lifts dollar and gold as investors seek safety

Monday 02 March 2026 - 12:30

The escalation of hostilities in the Middle East pushed the US dollar and gold higher on Monday, as investors turned to traditional safe-haven assets amid rising geopolitical uncertainty.

Following reported joint Israeli-American strikes on Iran over the weekend, Tehran responded with missile attacks targeting countries in the region. The confrontation has since expanded to Lebanon, where Israeli forces launched additional raids that observers say could continue in the coming days. The widening scope of the conflict has heightened concerns about regional stability and its potential impact on global markets.

Financial analysts note that such periods of tension typically prompt investors to retreat from riskier assets such as equities and emerging market currencies. Instead, they favor instruments perceived as more stable during times of crisis. Gold, long regarded as a store of value in uncertain environments, recorded a noticeable increase. The US dollar also strengthened against several major currencies.

Market strategists explain that geopolitical shocks often trigger rapid portfolio adjustments. “When uncertainty rises sharply, investors look for liquidity and security,” said one senior market analyst. “That usually benefits the dollar and precious metals.”

Despite the upward movement, the gains remain moderate compared to previous global crises. Traders appear cautious, balancing immediate geopolitical risks with broader economic factors, including interest rate expectations and energy market developments.

Oil prices also showed signs of volatility as investors assessed the possibility of supply disruptions in the region, a key hub for global energy production and transport routes. Any prolonged instability could influence inflation trends and central bank decisions worldwide.

For now, financial markets are closely monitoring diplomatic developments and military activity, aware that further escalation could amplify volatility across currencies, commodities, and equities.