Galaxy Securities: Escalation of Middle East conflict benefits gold and strategic metals in military industry.

Galaxy Securities research report stated that recently, the confrontation between the US and Iran has escalated. Historically, during conflicts in the Middle East, the increase in oil prices often leads to higher inflation expectations, coupled with rising safe-haven sentiment stimulating the rise in gold prices. In June 2025, Israeli and American military strikes against Iran escalated, causing gold prices to rise by 3% in the early stages of the conflict. After the outbreak of the Fourth Middle East War, OPEC announced an oil embargo which led to a 217% surge in oil prices from October 1973 to March 1974, with a surge of 68% in London gold driven by safe-haven and anti-inflation demand. In addition, US military actions against Venezuela at the beginning of the year and the recent attacks on Iran indicate that international tensions and geopolitical conflicts are intensifying, which may further drive global central banks and investment institutions to increase their holdings of gold assets, favoring a medium-term rise in gold prices. Furthermore, US military actions against Iran will further trigger increased military expenditures by various countries and the replenishment of weapons and equipment, creating additional demand for upstream metals such as tungsten, molybdenum, and germanium used in the defense industry. It is recommended to focus on leading military strategic metal companies.