April 20 (BBC/GNA) – Oil and gold prices have eased after Iranian authorities appeared to downplay reports of an attack from Israel.
Brent crude, the international benchmark,fell after jumping brieflyto over $90 a barrel after reports emerged of an attack.
Gold briefly came close to a record high before settling below $2,400 an ounce.
There are concerns a worsening conflict in the Middle East could disrupt oil supplies.
Investors have been closely watching Israel’s reaction to Iran’s direct drone and missile attack last weekend.
Oil prices had jumped by as much as 3.5% initially. But Brent then fell back to roughly $87 a barrel after Iranian state media claimed that there was “no damage” in Isfahan province where there had been reports of explosions.
Sharp and sustained rises in oil prices risk fuelling inflation. Countries are heavily reliant on the commodity, which is used to produce fuels such as petrol and diesel.
Fuel and energy prices have been a major driver behind the higher cost of living worldwide in the past couple of years.
Randeep Somel, fund manager at M&G Investment Management, told the BBC’s Today programme: “The concern for markets would mainly be the inflationary one, that this would actually add to inflation.”
While the pace of inflation has been slowing, in the UK it is still above the Bank of England’s 2% target and some economists have forecast that a cut to interest rates may not happen until summer or later on in the year.
“In the UK, the inflation rates is still around 3.2% – still someway off the target – and it is becoming a bit of a concern for policy makers,” said Mr Somel.
“It is good to see that this hasn’t escalated any further and that hopefully the disruption to markets is short-lived.”
The price of Brent is far below the heights reached after Russia invaded Ukraine in February 2022 when a number of major economies imposed sanctions on the oil-producing nation.
Oil hit $125 a barrel in the weeks that followed, leading to a sustained period of higher household energy bills.
The gold price often rises at times of uncertainty as it is seen as a safe investment.