US–Iran policy swings, gold drops to 4700, oil breaks above 100 USD as markets reprice risk

Geopolitics: US–Iran policy swings drive elevated uncertainty

Recent developments indicate that U.S. policy toward Iran is shifting rapidly, with President Donald Trump alternating between military pressure and openness to negotiations. Specifically, the U.S. has extended the ceasefire while maintaining maritime blockades in the Strait of Hormuz, and at the same time signaled willingness to resume talks if Iran presents acceptable proposals.
On the other hand, Iran maintains a firm stance, rejecting negotiations under pressure and continuing preparations for potential escalation. Internal divisions within Iran’s leadership have further complicated diplomatic progress Notably, the Strait of Hormuz remains in a cycle of “open – disrupted – negotiation – tension,” significantly impacting global oil transportation and increasing shipping and insurance costs.

Gold: Pulls back to 4700 after recent rally

Gold (XAU/USD) declined to around 4700 after three consecutive sessions of losses, reflecting profit-taking following its previous surge. This suggests that market panic has eased somewhat, with investors reassessing actual risk levels rather than reacting purely to headlines. However, gold remaining at elevated levels indicates that safe-haven demand persists, albeit in a more selective and cautious manner.

Oil: Brent rises above 100 USD on supply concerns and inventory drawdowns

Brent crude oil moved above 100 USD/barrel, marking a significant shift as energy markets begin to more clearly price in supply risks. In addition to ongoing geopolitical tensions in the Middle East, particularly around the Strait of Hormuz, the rally has been supported by declining fuel inventories in the United States, which has intensified concerns about short-term supply tightness. This suggests that oil prices are no longer driven purely by expectations, but increasingly reflect real supply-demand dynamics.

USD: Remains stable as a defensive anchor

The U.S. Dollar Index (DXY) held around 105–106, reinforcing the dollar’s role as a defensive asset. The Federal Reserve’s “higher for longer” stance continues to provide underlying support for the currency.

FX Majors: Limited movement as flows rebalance

EUR and GBP remained range-bound due to a lack of strong macro catalysts, while the Japanese yen showed limited safe-haven strength as rate differentials continue to weigh on its performance.

Market Overview

The market is entering a repricing phase, where gold’s pullback to 4700 reflects easing panic, oil breaking above 100 USD signals that supply risks are being more fully priced in, and the U.S. dollar remains stable, highlighting a transition toward more selective and fundamentals-driven positioning amid persistent geopolitical uncertainty.

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