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What is the impact of the US-Israel joint strike on Iran on the financial markets? How can we avoid having our wallets blown up?

The US and Israel are no longer pretending; they have officially launched a comprehensive joint military operation against Iran. The missiles weren’t very accurate, and while I was taking an afternoon nap, my account was blown to pieces... Now, Little Wealth God is here to talk about how this conflict affects the financial markets and how we should operate.

💣 First, let’s look at the latest developments in the US-Iran conflict according to the timeline:

February 27

The US government officially approved the evacuation of non-emergency personnel from the US mission in Israel and issued an emergency advisory urging them to leave as soon as possible. US Ambassador to Israel, Hekabi, even issued a stern warning: “If you need to leave, do so today.”

February 27

The Chinese Ministry of Foreign Affairs and Chinese embassies in Iran remind Chinese citizens to avoid traveling to Iran for the time being.

February 27

Trump stated he was “not satisfied” with the progress of Iran nuclear negotiations, “We don’t want to fight, but sometimes we have to.”

February 28 14:18

An explosion occurs in downtown Tehran, the capital of Iran.

February 28 14:20

Israel announces a “preemptive” strike on Iran.

February 28 14:39

An attack near the office of Iran’s Supreme Leader.

February 28 14:39

Israeli security officials say the attack on Iran is the result of joint US-Israel action.

February 28 14:50

US officials: The US airstrikes on Iran are ongoing.

Three hours ago

Israel is preparing for the first phase of a four-day joint strike.

Three hours ago

Explosions are heard in two western provinces of Iran.

Two hours ago

US officials: The US and Israel are launching a joint military operation against Iran.

Two hours ago

Iranian officials say they are preparing for a “destructive” retaliation.

Two hours ago

Seven missiles hit near the Iranian presidential palace and Khamenei’s residence.

Two hours ago

Israel announces its operation against Iran is called “Roaring Lion.”

Two hours ago

Israel orders the public to immediately enter shelters.

One hour ago

Multiple Iranian missiles attack Tel Aviv, Israel.

One hour ago

Trump states that after the war ends, he will take over the Iranian government.

One hour ago

Iran is hit by a third round of missile attacks.

51 minutes ago

The commander-in-chief of the Iranian army has died.

27 minutes ago

The US Navy base in Bahrain is attacked.

Summary: From the course of the conflict, it’s clear that the US and Israel are very determined in their strikes against Iran and have been prepared for a long time. In plain terms, they never intended to negotiate; they are ready to fight. Iran is not backing down either, retaliating against Israel. The conflict is already showing signs of evolving into a war. Trump’s statement about waiting for the war to end before considering Iran’s government also indicates that the US’s goal is to completely destroy the Iranian regime, possibly with ground troops later on. The conflict is unlikely to end soon and may even worsen. Currently, it’s a risk-avoidance phase, not the time to bottom-fish or deploy positions.

👉 Next, the possible directions of the conflict’s development:

To understand how this conflict might impact the financial markets, we first analyze several potential scenarios:

1. Full regional war (50% probability): The US-Israel coalition aims to overthrow the Iranian regime, launching a full-scale attack. Iran activates proxy armed groups, with Hezbollah in Lebanon, Houthi in Yemen, and others opening fire, spreading the war to neighboring countries.

2. US-Israel quick strike ending the war (40% probability): They target Iran’s leadership with precision strikes, quickly overthrow the regime through decapitation, and take control of the government, installing a new proxy government.

3. Short-term limited strikes (10% probability): After targeting key objectives, the US and Israel pull back, Iran restrains its retaliation, and international mediation leads to a ceasefire.

📈 Overview of the US-Iran war’s impact on financial markets:

1. Crude Oil Market: Short-term surge, long-term trend depends on conflict intensity.

The Strait of Hormuz, controlled by Iran, accounts for about 30% of global oil shipping. News of the US-Israel joint attack caused a panic-driven surge in oil prices. As of 15:00 on February 28, Brent crude futures in London broke $95/barrel, up over 4%; WTI futures in New York rose over 3.8%; Shanghai crude futures main contracts increased over 4.2%.

Looking ahead, if the conflict remains a short-term limited strike, with the US and Israel pulling back after hitting core targets and Iran restraining retaliation, oil prices could rise 10%-30% in the short term, with Brent potentially reaching $85-$100 per barrel. If the conflict escalates, with Iran retaliating by attacking oil tankers or disrupting shipping, prices could quickly jump to $90-$105 per barrel, oscillating at high levels for 1-3 months. If Iran blocks the Strait of Hormuz, prices could spike 40%-60% within 24 hours, surpassing $120 per barrel, possibly hitting $150 in the short term. However, the market has buffers: the US Strategic Petroleum Reserve holds about 415 million barrels, which can be released within 13 days at a maximum rate of 4.4 million barrels per day; OPEC+ idle capacity, with Saudi Arabia and others, has initiated emergency production increases, possibly raising output by 137,000 barrels/day in April; US shale oil is also elastic—high prices will incentivize US shale producers to expand capacity, increasing daily output from 13.4 million to over 14 million barrels.

2. Gold and Silver Markets:

Gold, with its dual role as a geopolitical risk hedge and inflation hedge, will likely see a surge of capital inflows. Historical experience shows that military conflicts in the Middle East tend to push precious metals prices higher. During the escalation of the Iran conflict in June 2025, gold prices briefly broke $2,300 per ounce. This event again confirms the safe-haven value of precious metals amid geopolitical risks. Since the market is closed for gold trading over the weekend, a strong opening on Monday is expected, with gold and silver prices rising sharply.

3. Stock Markets:

War usually causes risk assets to plunge. Since global stock markets are closed for the weekend, they are expected to be broadly impacted upon opening Monday. Investors, worried about escalating geopolitical risks and a slowdown in global economic recovery, will likely sell risk assets. Sectors like airlines, tourism, consumer discretionary, and tech growth stocks will lead declines, while defensive sectors, energy, and military stocks may outperform.

4. Forex Market:

(1) US Dollar: Short-term strength, medium-term pressure.

In the short term, safe-haven capital flows into the dollar, pushing the US dollar index higher. As the world’s primary reserve currency, the dollar often acts as a safe haven during geopolitical tensions. However, in the medium term, high oil prices will boost global inflation, forcing the Federal Reserve into a dilemma: inflation may require maintaining high interest rates or resuming rate hikes, but high rates will increase fiscal pressure and weaken the dollar’s attractiveness. Additionally, the US fiscal deficit could negatively impact the dollar’s outlook.

(2) Euro/Pound: Significant weakening.

Europe relies heavily on Middle Eastern energy; soaring oil prices will exacerbate imported inflation, slow economic growth, and increase pressure on the European Central Bank to cut rates, leading to euro/pound depreciation. Europe’s economic recovery is already fragile, and rising energy prices due to geopolitical conflicts further dampen prospects. Investor confidence in the euro and pound declines, causing their exchange rates to weaken.

5. Cryptocurrency Market:

Recent divergence between gold and Bitcoin has already demonstrated the collapse of the “digital gold” narrative. We should view Bitcoin more as a risk asset, which will be heavily impacted by war. In fact, Bitcoin has already fallen sharply—once dropping below $63,000, with over 150,000 liquidations across the network. Currently, Bitcoin hovers around $64,000, with major players observing further developments in the conflict to decide the next move.

📊 Most importantly, our response strategies:

In the next few days, closely monitor the evolution of the war to determine our trading approach.

1. If it escalates into a full regional war:

a. Gold and Silver Markets — Perpetual Contract Arbitrage.

Go long across the board. Since the weekend traditional finance markets are closed, you can first operate on XAUT and XAG perpetual contracts, buying dips and preparing for a rally when markets reopen on Monday.

b. Forex and Oil Markets — Traditional Finance Long Positions.

Currently, Iran has not yet blocked the Strait of Hormuz. If the war continues to intensify, oil and the dollar will likely keep rising. Consider going long in traditional markets.

c. Bitcoin Market — Short contracts, buy spot near previous lows.

If the conflict worsens, prices may challenge previous lows around $59,900. You can short via contracts. For long-term holders, every dip is an opportunity to buy the dip—don’t worry too much about where the price will bottom; buying spot around $59,900 is advisable.

2. If the war ends with a quick strike or ceasefire through international mediation:

a. Gold and Silver — Short positions.

b. Forex and Oil — Short positions.

c. Cryptocurrency — Long positions, with stop-loss around $59,900.

💡 Position Management: Under extreme events like war, markets tend to deviate from technical analysis. The first priority is to ensure the safety of your wallet. Every war is a painful process of the old order collapsing and a new balance forming. We are already fortunate to survive in a country far from the war zone. Don’t always think about making every penny at every moment. “A cannon roar, gold flows like a river” is a privilege of the capital giants. In this global capital “Monopoly” game, for retail investors, surviving is more important than winning once.