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Oil and Gold Surge as Middle East Tensions Rattle Global Markets

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Josh Gilbert Market Analyst At Etoro

Editor’s note: Geopolitical tensions in the Middle East are triggering a rapid market reaction, with oil and gold rallying while regional equities reel from disruptions. This editor’s briefing previews the immediate market response as UAE exchanges pause trading and investors weigh reopening scenarios. Market color from Josh Gilbert of eToro underscores the uncertainty and the central question: how long this disruption lasts and whether we see escalation or de-escalation in the coming days.

Markets hate uncertainty, and right now investors are facing one of the most unpredictable geopolitical backdrops in years. The key question is not just what has happened, but how long this disruption lasts and whether we see escalation or de-escalation in the coming days.

Rising Middle East tensions push oil and gold higher, rattling regional equities and shaping the near-term global outlook as markets await any de-escalation.

Key points

  • Oil prices surged to around US$82 per barrel, with Brent rising on disruption fears in the Strait of Hormuz.
  • Gold climbed above US$5,350 per ounce, reinforcing safe-haven demand amid geopolitical risk.
  • Abu Dhabi and Dubai exchanges were closed, highlighting the seriousness of the situation and uncertainty around reopening.
  • Risk assets weakened as capital rotated toward defensive positions, awaiting clarity on escalation or de-escalation.

Why this matters

As energy and precious metal prices respond to geopolitical risk, the near-term outlook for regional economies and global inflation remains sensitive to sentiment and policy signals. The UAE’s diversified, services-driven economy may weather disruption better than markets fear, but confidence and capital flows could face headwinds until de-escalation appears likely.

What to watch next

  • Reopening trajectory for UAE exchanges after the pause, with the next 48–72 hours critical for sentiment.
  • Oil price movement and its potential impact on transport costs and global inflation.
  • Gold’s continued safe-haven demand versus any shift in risk appetite.
  • Any changes in UAE tourism, aviation, and real estate activity tied to connectivity and confidence.

Disclosure: The content below is a press release provided by the company/PR representative. It is published for informational purposes.

Oil and Gold Surge as Middle East Tensions Rattle Global Markets

Abu Dhabi, UAE – 2 March 2026: Escalating tensions in the Middle East have sent shockwaves through global markets, pushing oil and gold sharply higher and raising fresh questions about the near-term outlook for regional equities.

Josh Gilbert Market Analyst At Etoro
Josh Gilbert Market Analyst At Etoro

Josh Gilbert, Market Analyst at eToro, said: “Markets hate uncertainty, and right now investors are facing one of the most unpredictable geopolitical backdrops in years. The key question is not just what has happened, but how long this disruption lasts and whether we see escalation or de-escalation in the coming days.”

The Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) remain closed on Monday and Tuesday in a rare move outside scheduled holidays, highlighting the seriousness of the situation. Investors are now focused on what reopening could look like once trading resumes.

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“History shows that outcomes vary widely,” Gilbert added. “When Turkey suspended trading after the 2023 earthquake, markets rallied strongly on reopening. When Russia halted trading after invading Ukraine, the outcome was far more severe. For UAE markets, the next 48 to 72 hours will be critical.”

Oil in Focus

Oil has been the immediate flashpoint. Brent crude surged as much as 13% to around US$82 per barrel, driven by fears of disruption in the Strait of Hormuz, which carries roughly 20% of the world’s crude oil and LNG supply.

“Even without a full closure of the Strait of Hormuz, disruption to tanker traffic is enough to rattle energy markets,” said Gilbert. “Conflicting signals from Iran have added to the uncertainty investors are trying to price in.”

There are, however, short-term buffers in place. The global oil market entered this period with relative oversupply, and OPEC+ had already announced a production increase of 206,000 barrels per day for April. Major consumers such as the US and China also hold substantial strategic reserves, while Saudi Arabia has pipeline capacity to reroute some exports.

“These measures provide short-term cushioning,” Gilbert noted. “But if tensions persist, sustained higher oil prices will filter through to transport costs and ultimately inflation globally.”

Gold Surges, Risk Assets Weaken

Gold has once again acted as the clearest safe haven, climbing above US$5,350 per ounce and gaining roughly 22% year-to-date.

“Gold remains the asset investors turn to in times of geopolitical stress,” Gilbert said. “Unless we see meaningful de-escalation, that safe-haven demand is unlikely to fade.”

Meanwhile, higher-risk assets, including cryptocurrencies, have come under pressure as investors rotate toward defensive positions.

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“In risk-off environments, capital typically flows to traditional safe havens rather than more volatile assets,” he added.

Direct Impact on the UAE

For the UAE, the implications extend beyond market volatility. Real estate, tourism, aviation, and retail — key pillars of economic diversification — are particularly exposed.

Dubai averaged approximately 13,000 home sales per month last year at an average price of AED 2.5 million, largely supported by foreign investment and expatriate inflows. With around 350,000 new units expected to come to market over the next two years, any sustained hit to confidence or capital flows could challenge demand absorption.

Tourism is another critical sector. Travel and tourism accounted for around 13% of UAE GDP in 2025. With hundreds of flights cancelled and temporary airport disruptions reported, the impact is already being felt.

“Dubai’s retail and hospitality ecosystem depends on connectivity,” Gilbert said. “Any prolonged disruption to airspace or tourism confidence will weigh on near-term growth.”

While higher oil prices may offer fiscal support, the UAE economy today is far more diversified and services-driven than it was a decade ago.

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“That means disrupted tourism, grounded flights, and shaken investor sentiment matter more than ever,” Gilbert explained.

Staying Focused on the Long Term

Gilbert cautioned against reactive decision-making.

“The instinct in moments like this is to act, but for most long-term investors, doing very little is often the wiser approach. Selling into panic rarely proves to be the right decision in hindsight.”

He concluded: “There is room for volatility when UAE markets reopen, particularly as very little geopolitical risk had been priced in. However, if de-escalation emerges quickly, the long-term fundamentals of the UAE — strong infrastructure, a pro-business regulatory framework, and its role as a regional hub — remain intact. Short-term turbulence does not undo decades of structural progress.”

About eToro

eToro is the trading and investing platform that empowers you to invest, share and learn. Founded in 2007 with the vision of a world where everyone can trade and invest in a simple and transparent way, today eToro has 40 million registered users from 75 countries.

eToro believes in the power of shared knowledge and that investors can become more successful by investing together. The platform has built a collaborative investment community designed to provide users with the tools they need to grow their knowledge and wealth. On eToro, users can hold a range of traditional and innovative assets and choose how they invest: trade directly, invest in a portfolio, or copy other investors.

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Risk & affiliate notice: Crypto assets are volatile and capital is at risk. This article may contain affiliate links. Read full disclosure

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Crypto World

Aave’s TVL Falls $8B After $293M Kelp DAO Hack

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Aave’s TVL Falls $8B After $293M Kelp DAO Hack

Total value locked on decentralized lending protocol Aave dropped by nearly $8 billion over the weekend after hackers behind the $293 million Kelp DAO exploit borrowed funds on Aave, leaving roughly $195 million in “bad debt” on the protocol and triggering withdrawals.

Data from DeFiLlama shows that Aave’s TVL fell from about $26.4 billion to $18.6 billion by Sunday, losing the top spot as the largest DeFi protocol. 

Aave v3’s lending pools for USDt (USDT) and USDC (USDC) are now at 100% utilization, meaning that more than $5.1 billion worth of stablecoins cannot be withdrawn until new liquidity arrives or borrows are repaid. 

$2,540 is available to be withdrawn from the $2.87 billion USDT pool on Aave v3 at the time of writing. Source: Aave

Aave’s TVL fall shows how rapidly risk from a single security incident can spread throughout the broader, interconnected DeFi lending market, potentially leading to a severe liquidity crisis.

The incident began on Saturday when hackers stole 116,500 Kelp DAO Restaked ETH (rsETH) tokens worth about $293 million from Kelp DAO’s LayerZero-powered bridge and used them as collateral on Aave v3 to borrow wrapped Ether (wETH).

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Crypto analytics platform Lookonchain said the move created about $195 million in “bad debt” on Aave, which contributed to the Aave (AAVE) token tanking nearly 20% from $112 on Saturday at 6:00 pm UTC to $89.5 about 25 hours later. 

Lookonchain noted that some of the largest crypto whales to withdraw funds from Aave were the MEXC crypto exchange and Abraxas Capital at $431 million and $392 million, respectively.

Source: Grvt

Several crypto networks and protocols tied to rsETH or the LayerZero bridge have paused use of the bridge until the problem is resolved, including DeFi platform Curve Finance, stablecoin issuer Ethena and BitGo’s Wrapped Bitcoin (WBTC).

Aave has frozen several rsETH, wETH markets

Shortly after the Kelp DAO exploit, Aave said it froze the rsETH markets on both Aave v3 and v4 to prevent any suspicious borrowing and later stated that rsETH on Ethereum mainnet remains fully backed by underlying assets.

WETH reserves also remain frozen on Ethereum, Arbitrum, Base, Mantle and Linea, Aave said.

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This incident marks the first significant stress test of Aave’s “Umbrella” security model, which was introduced in June 2025 to provide automated protection against protocol bad debt while enabling users to earn rewards.

Related: Aave DAO backs V4 mainnet plan in near-unanimous vote

Earlier this month, the Bank of Canada found that Aave avoided bad debt in its v3 market by using overcollateralization, automated liquidations and other strategies that shifted risk to borrowers.

In comments to Cointelegraph, Aave defended its liquidation-based model, framing it as a core safety mechanism that protects lenders while limiting downside for borrowers.

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It comes as Aave parted ways with its longest-standing DeFi risk service provider, Chaos Labs, on April 6, following disagreements over the direction of Aave v4 and budget constraints.

Magazine: Are DeFi devs liable for the illegal activity of others on their platforms?