Global assets are undergoing a fresh round of repricing following the announcement of a peace agreement between the United States and Iran.
During the Asia-Pacific trading session on June 15th, oil prices plummeted while global stock markets soared. Surprisingly, the safe-haven asset gold also strengthened significantly, presenting an atypical market dynamic that defies conventional wisdom.
According to a fund manager, the ceasefire agreement does not signify that the US dollar system has repaired the "deep fissures" exposed during the conflict. This prolonged conflict in the Middle East indicates that the US's dominant position in the energy order of the Strait of Hormuz has been challenged. Even if Iran ultimately reopens the shipping lanes, the credibility of the petrodollar system has left deeper questions in the global market.
The head of a major European asset manager's global solutions stated that internal discussions are ongoing regarding whether to increase gold holdings again. They maintain their view that the Federal Reserve will cut interest rates in 2027, with a gold price target of $5,500. Simultaneously, they believe the "AI bubble" is not yet a major concern, and the current market is likely just entering a digestion and adjustment phase, with valuations being repriced.
Shift in Gold's Safe-Haven Logic
Stimulated by the US-Iran peace deal, risk assets enjoyed a broad rally. The Shanghai Composite Index rose 1.61% on the 15th, closing at 4096.47 points. The Shenzhen Component Index surged 3.79%, while the ChiNext Index gained 5.3%. Additionally, Japan's Nikkei 225 rose 4.99%, with Kioxia Holdings Corp (TYO: 6963) up nearly 12% and SoftBank Group Corp (TYO: 9984) rising over 10%. South Korea's KOSPI index climbed over 5%, with SK Hynix Inc (KRX: 000660) up more than 6%.
The price of the safe-haven asset gold also experienced a sharp rally, breaking above $4,300 with gains exceeding 2.5%. Under the traditional framework, geopolitical easing implies pressure on safe-haven assets, but gold's performance this time completely overturned this pattern.
Why did gold rise instead of fall? Institutions widely believe the market is switching its narrative from "war hedging" to "inflation hedging."
The previous US-Iran conflict pushed up energy prices, directly driving the US CPI in May to climb to 4.2% year-on-year, the highest level since May 2023, with energy prices being the absolute main driver of inflation.
Analysis suggests that previous market concerns about Fed rate hikes were based on the assumption of persistently higher-than-expected inflation. The reopening of the Strait of Hormuz implies a weakening of inflation expectations, potentially reopening space for a shift in Fed policy and easing the pressure for rising US real bond yields.
After the peace agreement, the sharp drop in oil prices directly alleviated inflation expectations, suggesting the Fed's policy space for rate cuts may reopen, easing the pressure for rising US real yields. Gold is no longer a tool for betting on Middle East conflict escalation but is returning to its fundamental role as a "hedge against inflation and US dollar credit risk."
With gold prices around $4,500, having previously touched a high near $5,300, and considering growth and inflation cycles, gold remains a high-quality portfolio hedge with prominent asset stability. It is believed that when market concerns about currency devaluation, fiscal deficit expansion, and high global debt intensify, gold's value-preserving attributes will continue to be highlighted. Such medium-to-long-term macro contradictions are difficult to resolve completely in the short term, which will support a gradual upward shift in the price center.
One securities firm's view is that the medium-to-long-term upward logic for gold is not purely cyclical but resembles "institutional buying pressure": sustained gold purchases by global central banks, an irreversible trend of de-dollarization, and the long-term nature of fiscal deficits in major economies collectively determine that gold still possesses irreplaceable allocation value.
Oil Price Plunge Erases Geopolitical Premium
Oil prices crashed due to expectations of the Strait of Hormuz reopening.
According to vessel tracking data, the liquefied natural gas carrier 'Disha' passed through the Strait of Hormuz into the Gulf of Oman on the 15th. This is the first large energy carrier to transit the strait after the US-Iran agreement.
On June 15th, the WTI crude oil futures front-month contract fell sharply, breaking below $80 per barrel. Brent crude oil futures dropped over 5%, probing near $82 per barrel.
The oil price, which had been pushed to nearly $120 due to the US-Iran conflict, has now essentially erased all its geopolitical risk premium within just a few weeks.
One futures firm believes the short-term decline in oil prices is largely complete, with current prices at the lower end of this fluctuation range, leaving extremely limited downside. However, the market must remain vigilant for potential disruptions such as renewed geopolitical conflict, disagreements in implementing the US-Iran agreement, or resurgence of regional conflicts. Such geopolitical variables could trigger short-term oil price volatility at any time. Looking at the medium-to-long term on an annual basis, if peace can be sustained, international oil prices are expected to remain within a central fluctuation range of $75 to $85 per barrel over the next year, unlikely to see a unilateral sharp rise or fall.
Analysts from another futures firm pointed out that although both sides have formally confirmed the memorandum of understanding, the agreement is essentially a phased framework arrangement that does not address core contradictions like the nuclear issue and control of the strait. Therefore, expectations for the strait's reopening still face multiple uncertainties. The implementation sequence of the agreement's terms is yet to be finalized, and specific details of strait management remain unclear. Channel demining and port repairs also require time, and oil fields, gas fields, and refineries, previously severely damaged, will need considerable time for full recovery.
From an inventory perspective, the US Energy Information Administration warned in its latest Short-Term Energy Outlook that if Middle East conflicts cause extreme supply disruptions, with peak production losses reaching about 11 million barrels per day, oil inventories in major global economies would be depleted at a record pace. OECD member country inventories are projected to fall below 2.3 billion barrels by December, the lowest level since EIA records began in 2003.
The EIA estimates the Brent crude spot price average from June to July will reach $105 per barrel, showing a significant premium over futures prices for the same period.
Market institutions show clear divergence in judging the bottom for oil prices.
One futures firm believes the current price is at the lower end of the fluctuation range with extremely limited downside; another futures firm judges the short-term trend will be weak with further downside; a securities firm predicts Brent crude will fluctuate around $90 in the near term; while the EIA forecasts Brent crude at $86 per barrel by year-end.
Reshaping Global Asset Allocation Logic
The implementation of the US-Iran ceasefire agreement does not represent a complete resolution of geopolitical risks but rather serves as a key point for observing the new logic of global asset pricing.
Analysts from a securities firm believe the current ceasefire is more of a "phased achievement" than the final resolution of the Middle East situation. Significant differences remain between the two sides on multiple core issues, casting doubt on the continuity of the agreement's implementation. However, from an asset allocation perspective, after the short-term headwinds—once the strait enters an orderly opening phase and the "price discovery" for US bond rates is largely complete—it is still advisable to allocate to gold and strategic resources.
Secondly, new variables in the Federal Reserve's monetary policy cycle are reshaping global liquidity expectations. The Federal Reserve will announce its interest rate decision in the early hours of June 18th, Beijing time. The new Fed Chair, Kevin Warsh, will hold his first monetary policy press conference. The CME FedWatch Tool shows the probability of the Fed holding rates steady is as high as 98.5%.
Some institutions anticipate that the focus of this meeting may be on potential communication reforms initiated by Warsh, such as abolishing the dot plot or reducing the frequency of press conferences—the pricing anchors relied upon by the market are facing systematic adjustment. The suspense over the decision is limited, but the hawkish signals and reform roadmap released by Warsh will be the key variables affecting global asset pricing.
It is noted that the market has already priced in 2-3 more US rate hikes. The Fed theoretically has room to hike, but it's judged that an aggressive hiking cycle will not begin, with the base scenario being rates on hold. Current market liquidity is generally stable with no signals of tightness. The next Fed policy adjustment is expected in 2027, and that operation will be a rate cut.
From a longer-term perspective, Goldman Sachs recommends long-term investors overweight gold and underweight oil over the next five years, stating that gold can hedge against fiscal and central bank credibility risks, while oil can guard against supply shocks. Their analysis points out that high risks of US institutional credibility being impacted (fiscal expansion, pressure on the Fed) and global central bank demand for gold are the two core factors supporting an overweight in gold.
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