The weekend news is no longer referred to as 'escalation of conflict,' but rather feels like it is on the brink of losing control. While there are verbal calls for de-escalation, missiles are still being launched, and this scene itself indicates one thing—talking about trust is merely diplomatic rhetoric.
After the Houthis entered the fray, the situation has shifted from a point-to-point game to a multi-party restraint. What truly determines the direction is not who shouts the loudest, but time. If the frontlines are prolonged, and the situation does not cool down for two months, the market will no longer treat it as a 'short-term event,' but will begin to reassess energy supply, shipping security, and the Middle East landscape.
Many people jump to the conclusion that 'petrodollars are coming to an end,' which is quite emotional. The dollar system was not built in a day and cannot be overturned by a single conflict. However, if oil prices remain high, global inflation will be reignited, which is the real variable. Central banks are already in a bind, fearing both economic recession and inflation rebound; now with energy adding fuel to the fire, the space for policy will only become narrower.
The market's reaction has been quite direct—funds are first seeking safety, then observing. Risk assets will initially come under pressure, and volatility will be amplified. Gold will indeed benefit, but the rise in gold has never been about 'ending the old order,' but rather about panic premiums and hedging demand. The more tense the emotions, the more valuable it becomes.
What is truly worth monitoring are two lines: whether oil prices can stabilize, and whether the conflict will expand to shipping chokepoints. Once the risk premium in the Strait of Hormuz persists, global assets will be repriced.
Now is not the time for slogans, but for assessing the rhythm. If the war drags on, the market will not wait for a complete collapse to react, but will respond in advance. Many are still guessing the outcome, while capital is already changing positions.
