US-Iran tensions shake markets: Oil surges, gold declines

The mutual military operations conducted by the US and Iran over the weekend have stirred energy markets. On the first trading day of the week, the price of a barrel of Brent crude rose by 4.08% to $79.11, while the price of a barrel of US West Texas Intermediate (WTI) crude increased by 4.11% to $74.36.

Concerns that energy shipments through the Strait of Hormuz could be disrupted were a key factor in the price increases.

UNCERTAINTY PERSISTS IN THE STRAIT OF HORMUZ

The US Central Command (CENTCOM) announced on Sunday that it had conducted airstrikes on dozens of locations in Iran. In response, the Iranian Revolutionary Guard Corps announced that it had targeted US military bases in Kuwait and Bahrain.

While US President Donald Trump maintains that the Strait of Hormuz remains open to commercial shipping, Iran had previously announced that the strait was closed "until further notice."

Prior to the conflict, approximately 20% of global oil and liquefied natural gas trade was conducted through the Strait of Hormuz. According to vessel tracking data, only six ships passed through the strait on Sunday. This figure was recorded as the lowest level in the last five weeks.

GOLD PRICES DECLINED

While oil prices rose, gold started the week with a decline. Expectations that geopolitical developments could increase inflationary pressure and delay interest rate cuts by central banks caused investors to exit gold positions.

Gold per ounce fell to the $4,060 level on Monday, with a loss of up to 1.4%. Analysts state that rising oil prices, bond yields, and a strong dollar are putting pressure on gold.

ALL EYES ON NEW DEVELOPMENTS

Analysts are of the opinion that the attacks over the weekend have increased uncertainty regarding the future of the interim agreement reached between the US and Iran last month.

Markets are closely monitoring whether the latest developments are a temporary tension or a sign of a wider conflict.

News Source: 12punto