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Gold plunges as oil surges past $110, stoking inflation fears

Gold tumbled to near $5,050 an ounce, pressured by a stronger US dollar and concerns about higher interest rates as the war in the Middle East entered a second week, and oil surged above $100 a barrel. Bullion fell as much as 2.5 per cent after its first weekly decline in more than a month. Major oil producers in the Persian Gulf region curbed output due to the US-Israeli war with Iran, which shows no sign of resolution, and a gauge of the dollar jumped as much as 0.6 per cent. Gold has come under pressure as spiking crude prices stoke inflation fears in the US, raising the likelihood that the Federal Reserve will leave interest rates unchanged for longer or even raise them. Higher borrowing costs, as well as a stronger dollar, are typically negative for precious metals. The precious metal has also served as a source of liquidity during a deepening rout in global equities amid margin calls triggered by volatile energy markets.

Iran names Mojtaba Khamenei as new supreme leader

Iran’s Assembly of Experts announced that Mojtaba Khamenei, the 56-year-old son of slain Ayatollah Ali Khamenei, has been selected as the country’s new supreme leader in a decisive vote. The appointment comes just over a week after his father was killed in joint US-Israeli strikes on February 28, along with his wife and other family members. Mojtaba Khamenei has never held elected office but has for years operated behind the scenes from within his father’s office, cultivating influence across the security establishment, particularly within the Islamic Revolutionary Guard Corps. President Donald Trump had previously called Mojtaba a “lightweight” and said any supreme leader appointed without US approval was “not going to last long.” The selection signals that more hardline factions in Iran’s establishment retain power and could indicate the government has little desire to agree to negotiations in the short term. The IRGC and armed forces were quick to pledge support to the new leader.

Read Also: Who is Mojtaba Khamenei, Iran’s new Supreme Leader?

Iran offers counterterrorism support to Nigeria amid Israeli accusations

Iran’s ambassador to Nigeria, Gholamreza Mahdavi Raja, expressed Tehran’s readiness to assist Nigeria in its fight against terrorism, following accusations from 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 by Shi’ite members were expressions of mourning following the assassination of Ali Khamenei. The Iranian envoy dismissed Freeman’s allegations as “entirely unfounded and part of a propaganda campaign by a regime that has a long record of violence and violations of international law.” Raja said Iran is ready to share its counterterrorism experience with Nigeria, noting the country faces threats from Boko Haram and ISWAP. Freeman had specifically pointed to the Islamic Movement of Nigeria as a proxy backed by the late Supreme Leader, warning that Iran’s apparatus is dedicated to spreading terror and destabilising sovereign nations.

Europe overtakes the world as the biggest arms importer

Europe became the world’s biggest arms importer over the last five years as governments reacted to Russia’s threat and waning confidence in US security commitments, data from the Stockholm International Peace Research Institute showed. European countries more than tripled their arms imports in 2021-25 versus 2016-2020 to supply Ukraine in its defence against Russian invasion and to rebuild their own militaries after decades of under-investment. The sharp increase in arms flows to European states pushed global arms transfers up almost 10 per cent. Europe accounted for 33 per cent of global arms imports, up from 12 per cent in the previous five-year period. The US increased its global share of the arms export market to 42 per cent from 36 per cent, cementing its dominance, while Russia’s share dropped to 6.8 per cent from 21 per cent after its 2022 invasion of Ukraine. Arms imports by Middle Eastern states fell 13 per cent, though Saudi Arabia and Qatar were among the top four individual buyers.

Bond selloff deepens as oil surge stokes stagflation fears

Government bond markets from the euro zone to the United States and Britain sold off sharply as the air war in the Middle East drove oil and gas prices higher and rekindled inflation fears. Benchmark 10-year yields surged, with Britain’s up 16 basis points to 4.53 per cent, Germany’s up 8 basis points to 2.79 per cent, and the US up nearly 5 basis points to 4.10 per cent. Oil prices have jumped as shipping through the Strait of Hormuz, which carries around one-fifth of oil consumed globally and large quantities of liquefied natural gas, has ground to a near halt. Brent crude rose 7.5 per cent to $83.60 a barrel. The selloff reflects markets pricing in a scenario where a supply shock pushes inflation higher, and delays rate cuts, an unusual combination as geopolitical risk typically drives investors toward government bonds as safe assets. Traders have effectively abandoned hopes for imminent rate cuts, with swaps markets now pricing in a 97 per cent chance of a hold at the next Federal Open Market Committee meeting.