Investment: Where to invest your money amid the Middle East fires? Gold and silver are not the only options..

The ongoing Iran-Israel conflict in West Asia has caused instability in global financial markets over the past few days. Amid falling stock markets, investors are turning to safe havens like gold and silver. Crude oil prices have also seen a rise as the Strait of Hormuz, through which approximately 20 percent of global energy supplies pass, remained effectively closed for the fourth consecutive day.

The attacks have also affected air traffic in the Gulf region. Operations at major airports in Dubai and Doha were suspended over the weekend. Emirates, Etihad Airways, and Qatar Airways also suspended most flights. Analysts believe that geopolitical uncertainty may cause market volatility in the coming days. Meanwhile, global investment bank UBS says the disruption to energy supplies will only be temporary.

What should investors do?

The initial surge in oil prices may partially subside once it becomes clear that the energy supply disruption is temporary and that critical oil infrastructure has not been destroyed. Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, wrote in a note that while market volatility may persist in the coming weeks, investors will later return to focusing on the positive fundamentals of the global economy.

He argues that most geopolitical shocks in history have had a limited impact. According to UBS, panicking and reducing portfolio risk during such times has generally not been beneficial. The bank recommends investors maintain a long-term perspective, remain invested in broad equity indexes, and further diversify their portfolios during market downturns.

What is the market's future?

UBS said that the stock market may remain under pressure during the initial phase of military tensions, but UBS believes that the market is likely to rise by approximately 10 percent from current levels by the end of 2026 due to the strength of the US economy, strong corporate earnings, and increased global government spending.
The bank expects further growth in the US, as well as in Europe, Japan, China, and emerging markets. In the Asia-Pacific region, China (especially the tech sector), India, Australia, and Japan are considered key drivers of the next surge.

Focus on Precious Metals

UBS expects further growth in the commodity market, especially precious metals, in 2026. Given the rapidly changing conditions in West Asia, the bank believes actively managed commodity strategies may be more profitable.
The bank advises that investing a small portion (about a few percent) of total assets in gold can help diversify a portfolio and hedge against geopolitical risk. Additionally, options such as quality fixed income and hedge funds can help reduce portfolio volatility.

What if oil prices remain high?

According to UBS, if oil prices rapidly increase inflation, major central banks may consider raising interest rates. However, in recent years, central banks have indicated a tendency to overreact to one-time inflation spikes.

The bank believes that higher oil prices impose additional costs on consumers and companies, which could lead to tax increases. However, oil markets typically balance themselves, as rising prices lead to increased supply.

Therefore, UBS does not expect a temporary surge in oil prices to have a long-term impact on economic growth. However, if high prices persist for a long time, there could be a negative impact on oil-importing economies, although this impact would be limited and could subside within a few years.

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