A major escalation in tensions between the US and Iran - the two biggest oil-producing nations - following a US airstrike killing one of Iran's most powerful military commanders, General Qasem Soleimani, has sent global financial markets into a tailspin.

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While a rush to buy safe haven assets over the rising West Asia tensions acted as support of gold and silver prices, worries over an oil supply disruption boosted oil prices. Besides, investors turning risk averse led to a stock market decline.IANS

While the stock markets have taken a beating, gold, silver and oil prices have jumped sharply.

While a rush to buy safe-haven assets over the rising West Asia tensions acted as support of gold and silver prices, worries over an oil supply disruption boosted oil prices. Besides, investors turning risk-averse led to a stock market decline.

India's benchmark index, Sensex fell as much as 230 points as the global oil benchmark oil shot over 4 per cent to touch $70 a barrel. Besides, NYMEX crude rallied over 4 per cent on Friday to hit a high of $63.84/bbl, the highest level since May 2019.

The Indian rupee lost 34 paise to the US dollar and was trading at Rs 71.71 a dollar at 3 p.m.

On the MCX, gold contracts for February rallied nearly 2 per cent to trade at Rs 39,993 per 10 gram while silver also jumped over 1 per cent. COMEX gold rallied to hit a high of $1543.7/oz, the highest level since September.

Ravindra Rao of Kotak Securities said, "Crude oil prices might further move higher amid concerns about retaliatory moves by Iran. However, market reaction may subside if there is no retaliatory move by Iran or no major exchange of words between Tehran and Washington," Rao added.

Rao further noted that WTI crude oil is trading close to the resistance near $64/bbl. If the resistance holds, we expect a corrective dip in prices. On the contrary, if the price sustains above $64/bbl the upside might extend to $65.50/bbl.

"In case of gold, the immediate resistance is near $1546/Oz. On break of the resistance, the price might move close to the September 2019 highs of $1560/Oz," he said.

Analysts from Anant Rathi said that: "Adding to the geo-political tensions North Korea has given up hope on lifting of sanctions anytime soon as it looks to find a way to survive under crushing economic sanctions while building an even stronger nuclear powerhouse."