El-Erian, Chief Economic Adviser of Allianz: Gold oil may open higher, and the subsequent trend depends on the assessment of the situation by Iran and Israel

El-Erian, chief economic adviser to Allianz, said that Iran directly attacked Israel over the weekend. I wouldn't be surprised if, when the market opens on Monday, gold and oil prices move higher and equities and Treasury yields fall. What happens next will depend on whether the market consensus concludes that both Iran and Israel have sent a message to each other that they have done enough. That is precisely the goal of international diplomatic efforts, including Sunday's G7 meeting. However, this depends on the assessment of the situation by Iran and Israel. The global economy and markets are now in a relatively well-positioned position to deal with the risks of the current geopolitical situation. However, if the situation escalates further, it will bring an energy price shock and stifle the recovery of the manufacturing sector. And manufacturing is helping countries like Germany and the United Kingdom out of a technological recession. It would also complicate the inflation situation in the United States and exacerbate the trend of further international economic and financial fragmentation.