Global conflict between Iran and Israel causes economic turmoil; oil prices could reach $90, gold nears THB65,000 mark
Headlines1. Israel-Iran Conflict Causes Gold Prices to Spike in Thailand2. Warning of Escalating Israel-Iran War: a Threat to Middle East Stability and Global Economy3. Expert Predicts Crisis Duration, Potential Oil Price Shock, and GDP Slumps
Article
Israel Attacks Isfahan, Iran: Gold Prices Soar Amid Geopolitical Fears
In the heat of the night on June 13, 2025, Israel executed a massive military strike on Isfahan, Iran, targeting crucial military bases and nuclear facilities. The following day, Iran retaliated with a barrage of over 100 missiles, aimed at Tel Aviv and Jerusalem, leaving more than 30 people injured and raising security alerts throughout Israel.
The Israel Defense Forces (IDF) issued a nationwide state of emergency and heightened its air defense systems, anticipating further waves of attacks. Prime Minister Benjamin Netanyahu has urged the public to stay vigilant, warning of additional potential attacks from Iran.
Assoc Prof Ath Pisalvanich, an expert in international economic affairs, highlighted the direct impact of this conflict on global gold prices. According to him, the escalating tensions have led to gold prices surging steadily. As of June 14, the Gold Traders Association of Thailand reported domestic gold selling prices at THB52,550-53,350 per baht-weight, with a buy-back rate of THB52,450. Meanwhile, the international spot price based on the London market reached US$3,435 per ounce.
Ath predicted that if the conflict prolongs, gold prices could surge to THB60,000-65,000 per baht-weight, potentially reaching US$4,000 per ounce on a global scale. With geopolitical tensions on the rise, financial markets are expected to remain volatile, with gold acting as a safe-haven asset amid uncertainties in the Middle East.
The expert also noticed the influence of domestic unrest in the United States, particularly immigration-related protests in Los Angeles and New York, contributing to global market instability. This volatility has weakened the US dollar, while offering the Chinese yuan and Thai baht potential room to strengthen.
Ath also explained that while Israel's attack was significant and Iran may respond, any potential escalation is unlikely to be aimed at military escalation due to Iran's strategic and military position and the lack of support from major global powers.
A Worst-Case Scenario: Prolonged War, Oil Shock, and GDP Slumps
If the Israel-Iran war continues, Assoc Prof Ath Pisalvanich foresees the crisis extending for 1-2 months. In a worst-case scenario, Iran could close the Strait of Hormuz, a crucial shipping route handling over 20% of global oil shipments, potentially driving oil prices to US$90 per barrel and raising global logistics costs by more than 20%.
Compounding the crisis, the conflict could lead to Houthi militant attacks in the Red Sea, disrupting major shipping routes to Europe and further exacerbating global logistics costs and instability in the region.
As a result of these factors, Ath predicts global economic growth may decline to just 2.1% this year, falling below the World Bank's latest forecast of 2.3%. He also warns of potential GDP drops, with Thailand's GDP growth possibly decreasing to 1%, down from the earlier projection of 1.8%.
Exporters will face increased costs from oil and shipping, while grappling with new US trade tariffs and domestic tensions on the Thai-Cambodian border.
An Optimistic Scenario: Limited Conflict, Moderate Impact
If the conflict resolve within a month, oil prices may stabilize around US$80 per barrel, and logistics costs could increase only by 10%. While this represents a risk worth monitoring, it is a more manageable level compared to a worst-case scenario.
In this optimistic scenario, persistent sell-offs in global stock markets, particularly in the US, are expected. China, on the other hand, has accelerated its gold purchases, solidifying gold's status as a safe-haven asset amid regional uncertainties.
"With every new escalation, the global economy will shake even harder," concluded Ath.
- The spike in gold prices in Thailand is seen as a direct result of the international Israel-Iran conflict, making it a valuable asset for investors seeking a safe-haven in uncertain times.
- The escalating Israel-Iran war threatens not only the Middle East but also the global economy, with potential oil price shocks and GDP slumps being predicted.
- In addition to its impact on gold prices, the Israel-Iran conflict is expected to have a significant effect on the global stock market, specifically in the United States.
- The volatility in the international stock market, caused in part by the Israel-Iran conflict, is likely to have a ripple effect on personal finance, with investors encouraged to diversify their portfolios.
- The Israeli attack on Isfahan, Iran, and the anticipated Iranian response, may lead to disruptions in the food-and-drink industry, particularly in countries that heavily rely on oil exports.
- The health sector may be indirectly affected by the Israel-Iran conflict, as increased tensions and uncertainties in the Middle East could potentially divert funding from humanitarian causes.
- The Israel-Iran conflict, along with domestic unrest in the United States, is contributing to a weakened US dollar, offering potential opportunities for the Chinese yuan and Thai baht to gain strength in international finance.
- The travel industry, particularly in the Middle East, may face challenges due to the Israel-Iran conflict, as tensions and instability could deter tourists from visiting the region.
- The ongoing Israel-Iran conflict could lead to a shift in the technology industry, as countries seek to develop advanced defense systems to protect against potential attacks.
- The Israel-Iran conflict is a major topic in the general news, with updates on the crisis being covered extensively by international media outlets, as well as in discussions about sports and weather on news programs.
