Anticipation of a U.S.-Iran agreement has boosted global risk sentiment, pressuring oil prices lower while lifting equity futures and gold. On Monday, Brent crude fell over 4%, hitting a more than two-week low. Meanwhile, Nasdaq 100 futures gained 1%, S&P 500 futures rose 0.62%, spot gold extended gains to 1.3%, and spot silver jumped 4%. The U.S. dollar weakened against all G10 currencies.
On the news front, former President Donald Trump stated on social media Saturday that a U.S.-Iran deal is largely settled, including opening the Strait of Hormuz, and advised U.S. representatives not to rush the agreement. However, on Sunday he noted the deal is "not fully finalized." U.S. Secretary of State Marco Rubio had earlier indicated that there could be "some good news" on the Hormuz issue within hours.
Iran has adopted a cautious stance. Iran’s Tasnim News Agency warned that the draft agreement could still collapse due to U.S. obstacles on several key terms, including Iran’s demand for unfreezing assets.
Oil Under Pressure: Transit Resumes, but Volatility May Persist The immediate catalyst for the oil price decline is signs of improved actual transit through the Strait of Hormuz. According to Iran’s Student News Agency citing an Islamic Revolutionary Guard Corps statement, 33 vessels—including tankers, container ships, and other commercial vessels—passed through the Strait of Hormuz with IRGC Navy authorization within 24 hours on Sunday. Brent crude dropped over 4%, while WTI crude fell more than 5% at one point.
However, strategists including David Croy at ANZ Bank noted in a client report: "While any reopening of the Strait of Hormuz is positive for global oil flows, the fluidity of negotiations and unresolved disagreements suggest oil price volatility could persist for some time."
Gold Strengthens: Inflation Fears Ease, but Rate Pressure Remains Spot gold traded at $4,567.6 per ounce, up 1.35%, with spot silver rising 4%. Platinum and palladium also moved higher.
Gold had fallen 0.7% on Friday after Federal Reserve Governor Christopher Waller warned that energy shocks from the Iran conflict could push inflation higher, fueling expectations of monetary tightening. Since the Iran conflict escalated in late February, gold has declined about 14%, trading in a narrow range amid the tug-of-war between high interest rate expectations and a high-inflation, low-growth scenario. Rising hopes for a U.S.-Iran deal have somewhat eased concerns about oil-driven inflation, providing support for gold.
Tony Sycamore, an analyst at IG Sydney, wrote in a client note that Friday’s upward momentum "looks set to continue," adding that while any deal could still fall apart, "markets seem inclined to interpret related reports positively for now."
Comments