Bullion leaps, crude slides on Iran diplomacy hopes, testing Citi's thesis
Gold rose about 3.3% and Brent fell about 9% on Iran diplomacy hopes, testing Citi's de-escalation thesis. Fed hike odds stayed near 83%.
Trump said the US has no immediate plan to strike Iran and sees no need to act, even as Netanyahu hints at an attack this week.
Crude prices could shed some of their support on Trump's comments, since they lower the odds of a near-term escalation led by Washington — something markets had started to price in once Netanyahu began dropping hints. The relief will probably be modest, though: the risk premium in oil sits on the Strait of Hormuz, and supply risk there stays alive thanks to Iranian attacks, the US blockade of Iranian ports and Monday's limited US strikes. What matters more for oil is whether the Qatari-mediated talks yield a Hormuz deal, which would do far more to ease shipping risk than any one remark out of Washington. A split between Trump and Netanyahu also keeps alive the possibility of Israeli action without full US backing — a scenario that would probably send prices sharply higher.
If strikes are being planned, Trump is giving little away about them.
--
Escalation with Iran is not something Trump is rushing towards; Netanyahu is, and oil markets will be watching to see which of the two sets the pace.
Summary:
According to the Financial Times, US President Donald Trump said there is no plan in place to strike Iran at present. He gave the impression of being at ease with the stand-off as it stands, even while Israel's prime minister signals military action in the coming days.
In Trump's telling, Washington seemed to be getting all it wanted out of the situation. Asked about the firm hints from Israeli Prime Minister Benjamin Netanyahu that an attack could land within days, Trump answered that the US was completely prepared to act if required, but that there might be no reason to do so.
What he said suggests daylight between Washington and Israel. Officials cited by the Associated Press say Netanyahu has been urging Trump to order a fresh wave of strikes after the US midterm elections, which fall on Tuesday. In their account, a return to full-scale war might help Netanyahu piece together a governing coalition, having lost his parliamentary majority along with his allies. Trump made no commitment to strikes during a weekend call with Netanyahu.
None of that means US military activity has come to a halt. The AP reported that on Monday US forces launched limited strikes against Iranians who had fired missiles at American forces in the Strait of Hormuz. Explosions on islands in the strait and close to the port of Bandar Abbas were reported by Iranian state media. The operation was not announced publicly by the US.
Diplomatic efforts are running in parallel. Last week Qatari mediators held two rounds of talks with Iranian officials, and further rounds are set for this week. One framework under discussion would have Iran halt attacks in the Strait of Hormuz in return for the US lifting its blockade of Iranian ports. Tehran is seeking guarantees that Washington would honour any agreement.
Fighting broke out on 28 February, when strikes by the US and Israel killed Iran's supreme leader at the time. His successor, Mojtaba Khamenei, has reportedly ordered his forces to answer any threat with no geographic limits. Such a posture keeps the risk of escalation elevated, whatever Washington intends at the moment.
Share to
Disclaimer: this article comes from third-party media and is provided for reference only. It does not constitute investment advice. Crypto and other financial products carry significant price volatility risk, so please make your own decisions carefully.
Gold rose about 3.3% and Brent fell about 9% on Iran diplomacy hopes, testing Citi's de-escalation thesis. Fed hike odds stayed near 83%.
ADNOC denied a Bloomberg report that it was weighing a third Hormuz-bypass pipeline for other producers, calling the story inaccurate and speculative.
Citi forecasts gold at $5,000 if Strait of Hormuz reopens and lower oil triggers Fed rate cuts.
Copper fell to a three-month low as AI stock rout and reduced tariff expectations pressured prices.