Gold has fallen as oil crossed $110, increasing fears of inflation.
Gold fell to near $5,050 an ounce on pressure from a stronger US dollar and concerns over higher interest rates as the war in the Middle East entered a second week and oil rose above $100 a barrel. Bullion fell as much as 2.5 percent after its first weekly decline in more than a month. Major oil producers in the Persian Gulf region curbed output due to the US-Israel war with Iran, which shows no sign of resolution, and the dollar gauge jumped 0.6 percent. Gold has come under pressure as rising inflation fears in the US due to rising crude oil prices have increased the likelihood that the Federal Reserve will leave interest rates unchanged for a longer period of time or even raise them. Higher borrowing costs, as well as the stronger dollar, are generally negative for precious metals. The precious metal has also served as a source of liquidity during a deep slide in global equities amid margin calls due to volatile energy markets.
Iran has appointed Mojtaba Khamenei as the new supreme leader.
Iran's Assembly of Experts announced that Mojtaba Khamenei, the 56-year-old son of slain Ayatollah Ali Khamenei, has been elected as the country's new supreme leader in a decisive vote. The appointment comes just a week after his father, along with his wife and other family members, were killed in joint US-Israeli strikes on February 28. Mojtaba Khamenei has never held elected office, but he has worked behind the scenes within his father's office for years, wielding influence within the security establishment, particularly within the Islamic Revolutionary Guard Corps. President Donald Trump previously called Mojtaba a “lightweight” and said any supreme leader appointed without US approval “is not going to last long.” The selection indicates that the more radical factions in Iran's establishment retain power and may indicate that the government has little willingness to agree to talks in the short term. The IRGC and armed forces immediately pledged support to the new leader.
Also read: Who is Mojtaba Khamenei, the new supreme leader of Iran?
Iran offers anti-terrorism support to Nigeria amid Israeli allegations
Iran's Ambassador to Nigeria Gholamreza Mahdavi Raja expressed Tehran's readiness to assist Nigeria in the fight against terrorism, following allegations by Israeli Ambassador Michael Freeman that Iran sponsors extremist groups in the country. Raja told Arise Television that Islamic groups in Nigeria maintain only spiritual and cultural ties with Iran, not political ones, and that recent rallies of Shia members were an expression of mourning after the assassination of Ali Khamenei. The Iranian envoy described Freeman's allegations as “completely baseless and part of a propaganda campaign by a regime that has a long record of violence and violations of international law.” The king said Iran is ready to share its counter-terrorism experience with Nigeria, noting that the country faces threats from Boko Haram and ISWAP. Freeman specifically pointed to the Islamic Movement of Nigeria as a proxy supported by the late supreme leader, warning that Iran's apparatus is dedicated to spreading terror and destabilizing sovereign nations.
Europe overtakes world as largest arms importer
Data from the Stockholm International Peace Research Institute shows Europe has become the world's largest arms importer over the past five years as governments reacted to the Russian threat and declining confidence in US security commitments. European countries more than tripled their arms imports in 2021-25 versus 2016-2020 to supply Ukraine's defense against Russian aggression and to rebuild their armies after decades of underinvestment. The sharp increase in arms flows to European states has increased global arms transfers by about 10 percent. Europe's share in global arms imports was 33 percent, up from 12 percent in the previous five-year period. The US increased its global share of the arms export market from 36 per cent to 42 per cent, consolidating its dominance, while Russia's share fell from 21 per cent to 6.8 per cent following the 2022 invasion of Ukraine. Arms imports by Middle Eastern states declined by 13 percent, although Saudi Arabia and Qatar were among the top four individual buyers.
Bond selling deepens as fears of stagflation increase due to surge in oil
Government bond markets from the euro zone to the United States and Britain sold off sharply as the air war in the Middle East sent oil and gas prices soaring and rekindled inflation fears. Benchmark 10-year yields rose, with Britain's rising 16 basis points to 4.53 percent, Germany's rising 8 basis points to 2.79 percent, and the U.S. rising nearly 5 basis points to 4.10 percent. Oil prices have surged as shipping through the Strait of Hormuz, which carries about a fifth of the oil consumed globally and vast amounts of liquefied natural gas, has come to a near halt. Brent crude rose 7.5 percent to $ 83.60 per barrel. The selloff reflects the market's pricing in a scenario where a supply shock pushes inflation higher, and delays a rate cut, an unusual combination as geopolitical risk typically drives investors toward government bonds as safe assets. Traders have effectively given up hope of an imminent rate cut, with the swaps markets now pricing in a 97 percent chance of a rate cut at the next Federal Open Market Committee meeting.
