Find out why geopolitics in the Middle East can have a global impact and what that means to youThe Middle East and North African region is of immense economic, strategic, and geopolitical importance. Many of the world’s oil producers are located in the Middle East and Northern Africa. The region is home to the Suez Canal and the Strait of Hormuz, both of which are critical for global supply chains. In fact, these two shipping lanes handle more than 20% of the world’s oil shipments. Additionally, the area has experienced further economic growth, driven by the discovery of natural resources needed to produce renewable energy technology. It is also home to some of the world’s fastest-growing emerging economies and newly established supply chains. This is also why it can be vulnerable to geopolitical events and news with the potential to have knock-on effects across multiple asset types. Given the potential impact of this economic activity, should MENA traders look externally or internally for the next economic shock? Trade with the Right ConditionsOnce the market digests impactful news, prices tend to move rapidly. And from shifting oil supplies to regional tensions, almost every MENA headline can ripple through the global energy and currency markets. No matter how quickly things change or how wide-reaching the effects, partnering with the right broker can give traders a significant – and often underused – advantage. Having access to the right tools, insights, and trading conditions can help traders confidently navigate even turbulent markets. JustMarkets offers most of those critical conditions, in addition to being extremely transparent and reliable. The well-established broker also offers Copytrading, which allows novice traders to follow the strategies of experienced traders. They are ranked on a performance leaderboard, making it both simple and transparent to choose who to follow. Traders seeking a more hands-on approach can use the JustMarkets Trading App, though they may need additional data before beginning to trade. Read Between the Lines of Market DynamicsUnderstanding how assets are correlated can significantly enhance a trader’s ability to achieve their goals by providing them with deeper insights. First, a small disclaimer: no rule or observation is absolute in trading, so make sure that the correlation you are seeing is confirmed before acting. The following hypothetical example will use gold, oil, and the US dollar. In the case of a positive correlation, a trader may see oil rising and expect gold’s price to increase as well. In the case of negative correlations, the assets move in opposite directions, like USD and gold. The relationship between gold and oil can reveal even more about what’s going on in the market.The Oil to Gold RatioKnowing these dynamics and understanding the underlying reasons why they happen can yield even more information, including market sentiment and potential future trends. Two of the most popular assets, gold and oil, both of which are denominated in US dollars (i.e., bought and sold), have a dedicated “indicator” called the oil-to-gold ratio. This ratio represents the amount of oil that can be purchased with one ounce of gold. For the past 160 years, this indicator has averaged 19 barrels/ounce with an 8-barrel standard deviation. During scarcity or increased demand, the ratio has dipped below 10 barrels/ounce and above 30 barrels/ounce during periods when markets are “panicked”, economic depression, or when OPEC has significantly increased supply. The main reason is the inflationary relationship between the two: rising oil prices drive inflation, which in turn pushes traders towards gold (that is considered a stable store of wealth during inflation), pushing its price higher. Comparing oil to another extremely popular instrument, the USD, it is generally accepted to be negatively correlated. But keep in mind that, according to the European Central Bank, under specific conditions (such as immediately after an economic crisis), oil and the US dollar can be positively correlated. During different market shocks (that favor the dollar), however, there is again a negative correlation between oil and the USD. The reason for this mixed dynamic is primarily that the US recently became an oil supplier. Traders can use the oil-to-gold ratio as an additional confirmation of market sentiment. The Gold to USD CorrelationIn all but the most extreme market conditions, gold and the US dollar are negatively correlated. This means that as one price rises, the other drops. At the time of writing, several factors are exerting pressure on the USD. Rising inflation, the US government shutdown, and the anticipated US rate cut are all hurting the USD’s value, and due to negative correlation, bolstering gold prices. Although no longer part of the news cycle, tariff uncertainty continues to weigh on the dollar. These correlations may be amplified or weakened depending on macroeconomic events originating outside the MENA region but still affecting its economy. External Factors That May Affect MarketsOne of the most destabilizing economic events in recent times has been the infamous tariffs issued by the US and the reciprocal tariffs from the country’s trading partners. The resulting tit-for-tat has pushed tariffs to their highest level in a century. Further intensifying the current uncertainty is the unpredictability of these tariff policies. Many of them were announced without any forewarning, changed, or even fully rescinded in some cases. According to the International Monetary Fund, the increased fragmentation of the global economy, resulting from protectionist policies such as the aforementioned tariffs, compounds market instability and uncertainty. Even considering the current environment, the organization expects growth in the GCC countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates), due to the OPEC+ oil cuts, which remain in place but are likely to be phased out by the beginning of 2026. The first macroeconomic trend mentioned may affect gold, oil, and the USD, while the second set of circumstances may directly affect oil, particularly production. Even so, because oil is inextricably linked to global trade and the US is one of the world’s largest economies, it may affect the US dollar through inflationary pressures. For traders, these macroeconomic shifts reinforce the importance of having real-time analysis and reliable execution, which are both central to JustMarkets offering.How Geopolitics Affect Trading in MENADuring periods of instability, a trader should be aware of several factors. Failing to consider them while trading on a turbulent market can negatively impact their portfolio and returns. JustMarkets analyst says:“When markets are moving rapidly, risk management is critical. Traders should stay in control of their emotions and remain aware and adaptable as new information comes in. It also may be a good idea to look at the economic calendar for any high-impact events before you start your trading day.” In addition to that insightful note, MENA traders should keep a few things in mind as they navigate this period of volatility and market insecurity. What MENA traders should be aware of:Instability can cause big swings in the price of an asset.Having a solid risk management strategy in place should be a non-negotiable.Diversification is a very effective risk management strategy.Stay up-to-date with the latest news and macroeconomic events.A potential further point of MENA friction trader should be aware of is BRICS’s plan for “de-dollarization”. This is an attempt by the members of BRICS to replace the dollar with gold as the denomination for a multitude of commodities, including oil. This would obviously put pressure on the US dollar while further boosting gold prices. When looking at the numbers, though, BRICS produces 30% of the world’s oil, which is approximately the same amount as the heavily “dollarized” oil production of Canada, Mexico, and the US. As the BRICS includes multiple MENA members, any reciprocal action by the US may be laying the groundwork for an even shakier economic outlook. Trading Unstable Markets with the Right SupportAlthough MENA traders may seem more exposed to geopolitical risk, with the right risk management strategy, analysis, and broker protections, they can negotiate volatile markets. That's why JustMarkets always strives to offer all its traders the best possible conditions, such as: spreads from 0.0 pips, fast execution, minimum deposits starting at only $10, swap-free trading, flexible leverage up to 1:3000. High-quality and reliable support is also utmost important for the broker, along with the tools traders need to navigate volatile markets in the most transparent way. Visit JustMarkets for more information. This article was written by FM Contributors at www.financemagnates.com.