Middle East Tensions Spark 1.12% Dow Drop, 1.61% Gold Gain

On Thursday, Israel launched overnight airstrikes targeting Iranian nuclear installations, significantly escalating geopolitical tensions across the Middle East. This development led to a sharp decline in major U.S. equity indices on Friday. Concurrently, gold prices surged by 1.61% per ounce, while crude oil prices jumped over 5%.

The Israeli airstrikes on Iran triggered a global shift away from risk assets, causing equities to plummet while oil and gold prices rose sharply. Bitcoin (BTC) experienced a 1.9% drop over the past 24 hours, dragging the broader crypto market down by 3.21% by Friday. Investor sentiment plummeted as markets braced for potential retaliatory actions and a broader military escalation.

U.S. President Donald Trump stated that he had urged Iran to reach an agreement, emphasizing the importance of a deal. "I told them, in the strongest of words, to ‘just do it,’ but no matter how hard they tried, no matter how close they got, they just couldn’t get it done,” the president said. Two months ago, Trump gave Iran a 60-day ultimatum to "make a deal." He added, "They should have done it! Today is day 61. I told them what to do, but they just couldn’t get there. Now they have, perhaps, a second chance!"

Reassurances from political figures have done little to calm investor nerves. U.S. equities opened lower across the board on Friday morning, with all major indices showing losses. The Dow Jones Industrial Average led the decline, falling 1.12% to 42,488.01. The Nasdaq Composite dropped 0.72%, starting the session at 19,520.20, while the S&P 500 decreased 0.66% to 6,005.10.

Gold prices soared to $3,440 per ounce on Friday morning, while oil prices surged past $74, rising 5.9% in early trading. Over the past 12 months, both commodities—gold and oil—have consistently held their ground and gained favor during times of geopolitical unrest and armed conflict.

Crypto analyst and investor Nic Puckrin, founder of The Coin Bureau, commented on the escalating conflict in the Middle East. He warned that digital assets may face additional pressure in the short term, though he expressed confidence that bitcoin’s long-range resilience will ultimately prevail. "The biggest risk is if Iran were to close the Strait of Hormuz, which ferries nearly 20% of the world’s oil supply," Puckrin said. "If it does, oil will see a massive spike, and risk assets will fall off a cliff. And, if this happens over the weekend, the market that trades 24/7 – crypto – will once again take the hit."

Puckrin concluded that over the long term, what matters most for bitcoin isn’t geopolitics, it’s the US dollar index. And the DXY has just broken below 100, its lowest level in over three years. It’s clear USD is only going in one direction, and bitcoin typically goes in the opposite.