The ongoing tensions between the U.S. and Iran hit a new high today after a U.S. pre-dawn raid near Baghdad airport killed General Qassem Soleimani, the head of Iran's elite Islamic Revolutionary Guard Corps' Quds Force, and architect of its regional security apparatus. The raid also killed an Iraqi militia commander who had been accused by the U.S. of orchestrating the end of December attack on the U.S. embassy complex in Baghdad.
These developments signal a worrying escalation in the Middle East with the markets now awaiting the response from Iran. Decades of open and covert hostility between the U.S. supported by Saudi Arabia and Israel and Iran often finding support from Russia and China has now reached a very dangerous stage. There are plenty of news available about these latest events: Reuters: Soleimani was Iran's celebrity soldier, spearhead in Middle East Bloomberg: What to Know About the Escalating U.S.-Iran Conflict Al Jazeera: Iran's Qassem Soleimani killed in US air raid at Baghdad airport
The market reaction has been swift with Brent crude oil reaching $69.15/b, the highest level since the September Aramco attacks in Saudi Arabia. Gold’s safe-haven credentials meanwhile have given a renewed boost and it has built further on the late December rally to now stand less than 1% from the September peak at $1557/oz.
Brent crude oil reached but failed to breach the downtrend from the April 2019 peak overnight. Above that level the next resistance will be the September 16 peak which occurred after the attack on Aramco facilities within Saudi Arabia. An attack that Iran was blamed to have carried out.