Oil and Gold Prices Rise in the Aftermath of Paris Terrorist Attacks

Published: 19 November, 2015 11:25

In the wake of the Paris terror attacks on Friday 13th November 2015, gold and oil prices rose while other markets such as travel and tourism-related stocks fell.

On Monday 16th November, the BBC reported that gold prices had risen by 1% since the attacks, while oil prices also rose as the market reacted to concerns about oil availability following the French air strikes in Syria.

In contrast, Air France and and French hotel chain Accor each lost 5% of their share prices, while Eurotunnel Group lost 3%. On aggregate the stock markets remained fairly stable after the attacks, showing that the market overall is quite resilient. By Wednesday, gold prices had fallen back to the prices seen before the attacks, but oil prices had risen by a further 0.8%.

The rise of gold and oil prices in such extreme circumstances is a familiar pattern, as traders seek to invest in ’safe’ commodities that are seen as relatively stable and possessing intrinsic value.

Further terror attacks may drive the prices up again in a shaky global market. Just two weeks ago, before the Paris atrocities, an Investment Week feature debated whether gold is a poor investment with low returns over the long term.

However, online commodity traders may find gold and oil to be excellent investments in the current turbulent era. While other stocks may fall in response to catastrophic events, oil and gold retain their value and can even gain value as investors scramble for something secure to hold onto.

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