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The growing Middle East crisis, particularly between Israel and Gaza, is becoming a major concern for investors. The conflict escalated after the deadly blast at a hospital in Gaza City that killed hundreds of people.

If the conflict expands further, it could likely cause global inflation and, subsequently, an acceleration in interest rates around the world. It may have repercussions for global stocks markets and economy. However, some sectors or corners of the broad market are expected to gain or see increased attention amid such geopolitical tensions. We have highlighted them below:

Gold

The ongoing geopolitical tension has sent investors rushing for safe-haven assets like gold. This is especially true as gold is often used as a means of preserving wealth during times of financial and political uncertainty. It usually does well when other asset classes struggle. Gold prices have surged about $100 since the Israel-Hamas war began.

Metal miners are the biggest beneficiaries of the surge in gold price as mining companies act as a leveraged play on the underlying metal prices and thus tend to experience more gains than their bullion cousins in a rising metal market. iShares MSCI Global Gold Miners ETF (RING - Free Report), US Global GO GOLD and Precious Metal Miners ETF (GOAU - Free Report), and VanEck Gold Miners ETF (GDX - Free Report) have gained more than 5% over the past week and are likely to do so if the conflict intensifies further.

Defense

Rising geopolitical tensions could result in increased defense spending by the United States and its European allies. As such, ETFs tracking the defense companies saw solid inflows over the past 10 days. Invesco Aerospace & Defense ETF (PPA) has attracted $72.7 million in its asset base followed by inflows of $49.5 million for iShares U.S. Aerospace & Defense ETF (ITA - Free Report) and $16.8 million for SPDR S&P Aerospace & Defense ETF (XAR - Free Report). The three ETFs have gained in the range of 0.5%-1.1% each over the past week. These funds have a Zacks ETF Rank #2 (Buy) or #3 (Hold).

Energy

The political uncertainty across the Middle East has threatened oil supply, thereby leading to an oil price surge. Notably, the Middle East is home to almost a third of global supply. After rising more than 4% last week, U.S. crude oil extended its rise this week and reached close to $90 per barrel. Most analysts believe a full-blown regional conflict could send oil prices surging well above $100 a barrel, risking a global recession.

While several ETFs targeting the oil sector look to tap the rising oil price, iShares U.S. Oil & Gas Exploration & Production ETF (IEO - Free Report), Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report), SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report) and First Trust Energy AlphaDEX Fund (FXN - Free Report) rose more than 3% each over the past week. These ETFs have a solid Zacks ETF Rank #1 (Strong Buy) or #2.

Small-Caps

As escalating tensions in the Middle East remain an overhang, small-cap ETFs seem a prudent choice. This is because small-cap stocks are considered safer and better plays if political issues or economic turmoil creep into the picture. This is because the pint-sized stocks generate most of their revenues from the domestic market.

iShares Core S&P Small-Cap ETF (IJR - Free Report), Vanguard Small-Cap ETF (VB - Free Report), and Schwab U.S. Small-Cap ETF (SCHA - Free Report) having a Zacks ETF Rank #1 could be solid plays.

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