The violence in Israel that erupted this weekend is prompting a move into safe-haven assets like gold as investors closely watch events in the Middle East to gauge the geopolitical risk to markets.

Gunmen from the Palestinian group Hamas entered Israel in an unprecedented attack on Saturday. Western countries, led by the United States, denounced the attack and pledged support for Israel.

Rising Geopolitical Risk would see buying in assets like gold and the dollar , and boost demand for U.S. Treasuries, which have been sold off aggressively, analysts said over the weekend. As trading started in Asia on Monday those themes played out. U.S. stock futures slid, while crude , gold and Treasuries got a boost.

“This is a good example of why people need gold in their portfolios. It is a perfect hedge against international turmoil,” said Peter Cardillo, chief Market economist at Spartan Capital Securities, who predicted that the dollar would also benefit.

“Anytime there is international turmoil, the dollar strengthens,” Cardillo said.

Markets have been reacting in recent weeks to an expectation that U.S. interest rates will stay higher for longer. Bond yields have soared while the U.S. dollar has been on a streak of gains. Stocks meanwhile had sharp losses for the third quarter but stabilized in the last week.

“It seems Wall Street has a new geopolitical risk after Israel declared war with Hamas,” said Edward Moya, senior market analyst at Oanda in New York.

Analysts were focused on the impact on energy prices as they tried to assess the ripple effects. Oil prices jumped more than $4 a barrel in early Asian trade on Monday.

“Whether this is a massive market moment or not depends on how long it lasts and whether others are sucked into the conflict,” said Brian Jacobsen, chief economist at Annex Wealth Management, of the situation in Israel.

“Iranian oil production has been increasing, but any progress they’ve been making behind the scenes with the U.S. will be dramatically undermined by Iran’s celebrating Hamas’ actions,” said Jacobsen, adding that “the possible output loss matters, but it won’t be earth shattering.”

“It’s most critical to see how Saudi Arabia reacts,” Jacobsen said. Washington has been trying to strike a deal that would normalise ties between Israel and Saudi Arabia.

David Kotok, chair and chief investment officer at Cumberland Advisors in Sarasota, Florida, said that the situation was concerning as the United States is weakened by dysfunction in Washington. Republicans are looking for a successor to ousted Speaker Kevin McCarthy of the House of Representatives, and a budget showdown looms.

“I am very worried about more explosive situations that require U.S. determination and U.S. defense capability which is being injured,” by the situation in Washington, Kotok said.

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The violence in Israel that erupted this weekend is prompting a move into safe-haven assets like gold as investors closely watch events in the Middle East to gauge the geopolitical risk to markets.

Gunmen from the Palestinian group Hamas entered Israel in an unprecedented attack on Saturday. Western countries, led by the United States, denounced the attack and pledged support for Israel.

Rising geopolitical risk would see buying in assets like gold and the dollar , and boost demand for U.S. Treasuries, which have been sold off aggressively, analysts said over the weekend. As trading started in Asia on Monday those themes played out. U.S. stock futures slid, while crude , gold and Treasuries got a boost.

“This is a good example of why people need gold in their portfolios. It is a perfect hedge against international turmoil,” said Peter Cardillo, chief market economist at Spartan Capital Securities, who predicted that the dollar would also benefit.

“Anytime there is international turmoil, the dollar strengthens,” Cardillo said.

Markets have been reacting in recent weeks to an expectation that U.S. interest rates will stay higher for longer. Bond yields have soared while the U.S. dollar has been on a streak of gains. Stocks meanwhile had sharp losses for the third quarter but stabilized in the last week.

“It seems Wall Street has a new geopolitical risk after Israel declared war with Hamas,” said Edward Moya, senior market analyst at Oanda in New York.

Analysts were focused on the impact on energy prices as they tried to assess the ripple effects. Oil prices jumped more than $4 a barrel in early Asian trade on Monday.

“Whether this is a massive market moment or not depends on how long it lasts and whether others are sucked into the conflict,” said Brian Jacobsen, chief economist at Annex Wealth Management, of the situation in Israel.

“Iranian oil production has been increasing, but any progress they’ve been making behind the scenes with the U.S. will be dramatically undermined by Iran’s celebrating Hamas’ actions,” said Jacobsen, adding that “the possible output loss matters, but it won’t be earth shattering.”

“It’s most critical to see how Saudi Arabia reacts,” Jacobsen said. Washington has been trying to strike a deal that would normalise ties between Israel and Saudi Arabia.

David Kotok, chair and chief investment officer at Cumberland Advisors in Sarasota, Florida, said that the situation was concerning as the United States is weakened by dysfunction in Washington. Republicans are looking for a successor to ousted Speaker Kevin McCarthy of the House of Representatives, and a budget showdown looms.

“I am very worried about more explosive situations that require U.S. determination and U.S. defense capability which is being injured,” by the situation in Washington, Kotok said.