Global Markets React to Iran-US Deal as Oil Falls and Gold Surges

PUKMEDIA

Oil and Precious Metals.

The announcement of a memorandum of understanding between the United States and Iran had an immediate impact on global financial markets, with investors viewing the agreement as a major breakthrough towards resolving one of the most significant geopolitical crises affecting global energy supplies in recent months.

Oil prices fell sharply, while gold and silver recorded notable gains, as markets reassessed the potential implications of the agreement for energy supplies, inflation, and future monetary policy.

Brent crude dropped by approximately 4.1% to $83.75 per barrel, while US West Texas Intermediate crude fell 4.7% to $80.87 per barrel. Both benchmarks reached their lowest levels since March.

The decline reflected the unwinding of the so-called “geopolitical risk premium” that had supported oil prices during the conflict, particularly after disruptions to shipping through the Strait of Hormuz, which had been effectively closed for more than three months.

Tim Waterer, Chief Market Analyst at KCM Trade, said: “The geopolitical risk premium reflected in crude oil prices is now being unwound rapidly, as traders anticipate the resumption of oil flows.”

Meanwhile, gold rose by more than 1.8% to $4,297 per ounce, its highest level since 9 June, while US gold futures climbed above $4,318 per ounce.

The rise in gold prices came despite easing geopolitical tensions, supported by a weaker US dollar, which fell to its lowest level in ten days, and growing expectations that the United States may move away from further monetary tightening.

Silver also posted strong gains, with spot prices rising by more than 3% to $70.19 per ounce, according to Cairo News Channel.

Market analysts said investors are increasingly betting that the restoration of oil and gas flows through the Gulf will help ease inflationary pressures, potentially reducing the need for US interest rates to remain elevated for an extended period.


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