Given the magnitude of events which transpired in the Middle East over the weekend, it was perhaps surprising to see markets respond in a relatively calm fashion today.

The FTSE 100 rallied somewhat to regain some of its morning losses, futures prices tied to US stock markets rebounded following sell-offs last week, and oil prices lost some ground when further upward pressure may have been expected.

But the relative calm on the markets does not mean the crisis is over. Market-watchers were quick to emphasise that the outlook remains riven by uncertainty as there appears to be little sign of the crisis in Gaza ending. Moreover, the world is waiting with bated breath to see how Israel will respond to the unprecedented attack on its sovereignty by long-standing enemy Iran, as concern grows the conflict between Israel and Hamas in Gaza will widen into a broader regional war.

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Nigel Green, chief executive of independent financial advisor deVere Group, characterised the response of markets today as a “slight relief rally”, amid hopes that Israeli Prime Minister Benjamin Netanyahu is paying heed to exhortations from US President Joe Biden to refrain from striking back at Iran and de-escalate the crisis.

“However,” Mr Green warns, “the situation remains highly volatile and investors who are serious about protecting and growing their capital cannot now just sit back and relax.”

Other market-watchers highlighted the ongoing tension around events in the Middle East and the prospect that oil prices may yet be influenced by events. Susannah Streeter at Hargreaves Lansdown noted that the crisis had already helped push oil prices to around $90 per barrel and warned there is a “risk crude costs could push even higher if a wider war breaks in the region”.

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Amid the continuing tension, gold is again underlining its attraction as a safe haven for investors, with prices remaining at near-record highs. Gold was fixed this afternoon at $2353.68 an ounce compared with $2,397.12 at the previous close.