Significant progress has been made in US-Iran negotiations!
On the evening of June 22, at 19:00 Beijing time, US Vice President Vance delivered a speech in Switzerland.
He stated that talks with Iran are progressing very smoothly, with many positive developments achieved. Technical discussions will continue, and he will soon return to the United States. Concurrently, Iran has agreed to invite International Atomic Energy Agency inspectors to visit the country again.
Furthermore, Vance announced the establishment of a mechanism to keep the Strait of Hormuz open, which is currently operational.
Media reports indicate that shipping data shows at least 11 oil tankers have recently departed from Iran's Chabahar port, carrying a total of approximately 20 million barrels of crude oil. Simultaneously, Iran has also resumed loading operations at its main export terminal, Kharg Island. This terminal had been suspended for about six weeks due to a US naval blockade, with the lifting of the blockade being part of the interim agreement.
Vance emphasized that if the conflict continues to escalate, it will not help any party safeguard its own security and could instead harm the overall security situation in the region. Therefore, the US has established communication and coordination mechanisms with relevant parties to ensure the situation does not deteriorate further.
Oil Prices Plunge
WTI crude oil turned from gains to losses following this news, at one point falling over 2%. As of the time of writing, it remains down more than 1%.
Gold Prices Surge Rapidly
Spot gold in London surged sharply, rebounding to $4,205 per ounce, ending a three-day consecutive decline.
Future Market Outlook
Regarding oil, Goldman Sachs has lowered its oil price forecast, predicting the average Brent crude price to be $80 by the end of 2026 and $75 in 2027. This revision is based on the faster-than-expected restoration of crude supply from the Persian Gulf. However, analysts warn that a decline in oil prices does not equate to the dissipation of inflationary pressures—there is a lag in the transmission of upstream energy costs to downstream sectors, with natural gas prices typically lagging by about three months.
For gold, despite recording its first gain in four days, market expectations for further Federal Reserve interest rate hikes continue to suppress upward momentum for the precious metal. Federal funds futures markets indicate traders are pricing in a nearly 90% probability of another Fed rate hike by year-end, a key factor capping gold's gains.
Morgan Stanley remains optimistic about gold's long-term prospects, as easing Middle East tensions and falling oil prices help alleviate inflation concerns. However, the Fed's hawkish tone at its most recent meeting reinforced expectations that interest rates will remain elevated for longer, increasing the opportunity cost of holding non-yielding assets like gold.
Morgan Stanley believes that without a significant recovery in ETF fund inflows, its bullish target for gold to reach $5,200 in the second half of the year will become increasingly difficult to achieve.
Morgan Stanley analysts noted, "While central bank gold purchases may continue, ETF flows are more sensitive to changes in interest rate expectations. The missing link is ETF demand, which is likely to remain sensitive to the Fed's policy path, real yields, and the US dollar."
UBS Group has revised down its gold targets for 2026: the mid-year target is reduced to approximately $5,200 per ounce, and the year-end target is lowered from $5,900 to around $5,500. This adjustment primarily stems from a stronger US dollar, high real yields, and weak short-term investor demand.
Nevertheless, UBS Group still views gold as an attractive diversification asset, expecting demand to recover in the second half of the year with support from central bank purchases and physical demand from Asia. While earlier, more aggressive forecasts (mid-year $6,200, upside scenario $7,200) have been revised, the long-term bullish thesis remains unchanged: geopolitical risks, the possibility of stagflation, and global reserve diversification will continue to benefit gold prices.
With current spot gold trading around $4,150 to $4,200, UBS Group views this as a market adjustment period for "rediscovering opportunity cost," but it does not change the bull market trend. Downside risks include the Fed maintaining higher rates for longer, while upside catalysts could be a geopolitical escalation or weaker economic data. Institutions advise investors to view gold as a long-term hedge and maintain a moderate allocation. The overall outlook is cautiously optimistic, emphasizing the need to capture structural opportunities amidst volatility.
Comments