07.07.2025 05:11

Late Sunday, Israel's military launched a series of intense strikes against Houthi targets within Yemen. These attacks, confirmed by Defence Minister Israel Katz, specifically targeted three ports and a power plant. The justification cited was the Houthi group's repeated attacks on Israel, despite the June truce between Iran and other parties.

Preceding the strikes, the Israeli Defence Forces (IDF) issued evacuation warnings for the same Houthi-controlled facilities. This proactive measure underscored the severity of the perceived threat, highlighting the ongoing drone and missile attacks launched by the Houthis against Israel, even after the truce commenced.

The Israeli military action has had a noticeable impact on global markets. At the time of writing, gold prices (XAU/USD) experienced a slight decline of 0.19%, trading at $1,933. This market reaction reflects a shift in investor sentiment, illustrating the interconnectedness of geopolitical events and global financial markets.

The market's response can be analyzed through the lens of "risk-on" and "risk-off" sentiment. A "risk-on" environment indicates investor optimism, leading to purchases of higher-risk assets like stocks and cryptocurrencies. Conversely, a "risk-off" environment, driven by uncertainty, sees investors gravitating towards safer assets such as government bonds and gold. The current market dip suggests a move towards a more cautious "risk-off" approach, at least in part due to the escalating situation in Yemen. This typically leads to increases in the value of safe-haven assets like gold, the Japanese Yen, Swiss Franc, and US Dollar, while potentially impacting commodity-exporting nations' currencies and assets such as the Australian, Canadian, and New Zealand Dollars.