Iran has responded to former U.S. President Trump's claims of victory. On April 1, Trump declared that the U.S. had achieved a swift, decisive, and overwhelming victory against Iran. In response, the Chairman of the Iranian Government Information Committee dismissed Trump's statements as nonsense on April 2.
The chairman emphasized that Iran's missile capabilities are continuously strengthening, with significant missile reserves stored at various locations. He also stated that Iran's enriched uranium remains secure and the Strait of Hormuz is still under Iranian control. He added that recent attacks by the U.S. and Israel have strengthened national unity and cohesion among Iranian officials.
Multiple Iranian industrial and infrastructure sites have been attacked. As of April 2, production at the Isfahan Mobarakeh Steel Plant has completely halted due to repeated attacks. Furthermore, the Beyk Road Bridge in Karaj, a landmark engineering project considered one of the world's most complex achievements and a core part of the Tehran-Karaj transport corridor, sustained damage to its main structure from attacks and has been closed. Explosions or attacks were also reported in Tehran, Karaj, several areas in Khuzestan Province, and the city of Hamedan on the same day.
In retaliation, Iran continued its "True Promise-4" military operation. According to Iranian military statements, the 90th and 91st waves of strikes targeted assets and facilities linked to the U.S. and Israel. These reportedly included an Oracle data center in Dubai; U.S. steel and metal industrial facilities in Abu Dhabi; an Amazon data center in Bahrain; Alcoa facilities in Bahrain; facilities associated with the Israeli defense contractor Rafael; and several military bases and gathering points belonging to the U.S. and Israel across the Middle East. An Iranian armed forces spokesperson stated late on April 2 that recent operations had struck a company whose value was approximately twice that of the Isfahan Mobarakeh Steel Company, noting its capital and products were U.S.-owned.
Regarding the potential for a U.S. ground invasion, the Commander-in-Chief of the Iranian Army issued orders on April 2 for extreme vigilance and close monitoring of U.S. and Israeli movements. He commanded that forces must counter the enemy at an opportune time and ensure no survivors if a ground war is initiated.
In related developments, Yemen's Houthi group and Lebanon's Hezbollah continued military actions against Israel on April 2. The Houthis stated they conducted joint operations with Iran and Hezbollah, launching ballistic missiles at targets in the Tel Aviv area. They indicated their military involvement is part of an escalating response and may be adjusted based on the situation.
Escalating Middle East tensions drove a sharp rise in international oil prices and a decline in precious metals on April 2. At market close, the WTI crude oil futures front-month contract surged 11.93% to $112.06 per barrel, while Brent crude futures rose 7.99% to $109.24 per barrel. Spot gold prices fell over 2%, and silver prices dropped more than 3%.
In U.S. stock markets, major indices recovered from early losses to close mixed. The Dow Jones Industrial Average ended down 0.13%, the Nasdaq Composite rose 0.18%, and the S&P 500 gained 0.11%. Markets were closed on Friday for Good Friday, marking the first positive week since the conflict began, with weekly gains of 2.96% for the Dow, 4.44% for the Nasdaq, and 3.36% for the S&P 500.
Analysts cautioned against excessive pessimism regarding gold prices. Galaxy Futures precious metals analyst Yuan Zheng attributed the sharp decline to a reversal in market expectations. While Middle East tensions had previously appeared to ease, Trump's recent speech signaling more aggressive actions in the coming weeks triggered the oil price surge, renewed inflation concerns, and rising U.S. Treasury yields, all negatively impacting gold and silver.
Qisheng Futures analyst Liu Xiaolin noted that violent swings in precious metals are primarily driven by geopolitical developments. Market hopes for U.S.-Iran negotiations were dashed by Trump's强硬 stance, leading to a drop in risk appetite.
Huishang Futures analyst Cong Shanshan pointed to significant ongoing uncertainty in the Middle East, prompting a flight to safety into the U.S. dollar and a rapid rise in the dollar index. She stated that geopolitical tensions remain the core driver for precious metals. An escalation could strengthen stagflation expectations. Initially, rapidly rising real interest rates may suppress gold prices, but this effect typically weakens in the medium term, allowing for a rebound. If the Middle East conflict subsides in the second quarter and global economic recovery begins alongside renewed monetary easing by central banks, gold and silver prices could see a moderate recovery.
Liu Xiaolin added that current gold prices already reflect a significant degree of risk premium for Middle East escalation and inflation. Unless a major, unforeseen escalation occurs, gold prices are likely to stabilize and find a floor.
Looking ahead, Cong Shanshan believes short-term price action will depend on Middle East developments. A widening conflict could lead to stagflation-driven markets, with gold potentially falling before rising. If tensions ease in Q2, prices may enter a period of moderate recovery. Long-term, persistent safe-haven and central bank buying demand should provide stable support for gold, while silver may experience higher volatility.
Yuan Zheng expects gold to maintain wide fluctuations in the near term, with the bull-bear struggle centered on the Middle East situation. Long-term structural factors like deglobalization, de-dollarization, and the strategic allocation value of gold amid persistent conflicts, supported by central bank demand, remain intact.
Overall, analysts suggest that short-term precious metal volatility will continue to revolve around Middle East geopolitics. From a tactical allocation perspective, they advise against excessive bearishness on gold, noting potential opportunities to establish positions on price dips.
Comments