Gold rose slightly on Thursday, as it looks to build on the gains it posted in the previous session while struggling to hold above $4,400. The yellow metal is currently seeking to maintain trading above the uptrend line to continue its gains, targeting resistance levels at $4,473 then $4,511. On the downside, if the price falls below the aforesaid trend line, it may retreat toward support levels near $4,364 then $4,327.
Global financial and commodity markets remain highly sensitive to escalating geopolitical tensions and growing concerns over energy supplies. Brent crude prices have held above $100 per barrel as disruptions to oil shipping and heightened risks around the Strait of Hormuz raise fears of tighter global supplies. At the same time, the U.S. dollar has remained near a three-week low, reflecting shifting expectations for monetary policy and movements in Treasury yields. Meanwhile, investors continue to closely monitor developments between Iran and the United States, particularly after attacks targeting oil tankers, as markets assess the potential implications for global energy prices, inflation, and the broader economic outlook.
Market Watch
Iran and the United States Target Oil Tankers Amid Rising Tensions in the Strait of Hormuz
Tensions between Iran and the United States have escalated in the Gulf region after the latest wave of attacks on maritime shipping, marking the most significant disruption to commercial vessels since the war between the two countries began nearly six months ago. The developments have raised growing concerns over global oil supplies and kept crude prices above $100 per barrel.
Iran said on Wednesday that it had targeted 10 vessels near the Strait of Hormuz, including oil tankers, in response to U.S. attacks on Iranian oil tankers. According to Reuters, Tehran said the United States had sunk five Iranian oil tankers, while Iran’s Islamic Revolutionary Guard Corps said it had targeted vessels that it considered to be non-compliant with its maritime instructions.
The developments came after the U.S. military announced that it had targeted five Iranian oil tankers in recent days, following Iranian attacks on U.S. naval vessels in the region. Washington had previously targeted three Iranian tankers, saying that the vessels were linked to a network used to finance Iran’s Islamic Revolutionary Guard Corps. Tehran described the U.S. strikes as a dangerous escalation and threatened to expand its response against vessels linked to the United States.
The attacks have raised significant concerns over the security of the Strait of Hormuz, through which roughly one-fifth of global oil and gas supplies passed before the conflict. The sharp decline in shipping traffic through the strait has heightened fears of further disruptions to energy exports, particularly as alternative routes in the region face increasing pressure.
The escalation has quickly affected oil markets, with Brent crude remaining above $100 per barrel during Thursday’s trading session. Brent was trading at around $100.50 per barrel, while West Texas Intermediate (WTI) stood at approximately $95.58 per barrel, as investors continued to assess the potential impact of supply disruptions on global energy markets. Brent has risen by nearly 30% from its early-August lows.
Investors will closely monitor whether the confrontation in the Gulf expands further, as continued attacks on oil tankers could increase the geopolitical risk premium in energy markets and add further pressure to global oil prices and inflation.
Brent Crude Holds Above $100 Amid Concerns Over Supply Disruptions
Brent crude prices remained above $100 per barrel during Thursday’s trading session despite a slight decline, as concerns over global oil supplies persisted amid escalating military tensions between the United States and Iran and growing attacks on shipping activity in the Gulf region.
Brent futures fell by around 0.7% to $100.50 per barrel by 06:19 GMT, while U.S. West Texas Intermediate (WTI) crude declined by 0.5% to $95.58 per barrel. The move followed a more than 2.8% increase in Brent prices during Wednesday’s session, when the benchmark surpassed the $100 level for the first time since July.
Markets continued to assess the impact of the latest escalation between Washington and Tehran after Iran said it had targeted 10 vessels near the Strait of Hormuz, following the U.S. announcement that it had destroyed five Iranian oil tankers. The developments have intensified concerns over potential disruptions to oil transportation through the region, particularly as the Strait of Hormuz previously handled around one-fifth of global oil and gas supplies.
Pressure has also increased on alternative oil-export routes following a rise in attacks by Iran-aligned Houthi forces on Saudi Arabia, threatening crude shipments through the Red Sea and adding further geopolitical risk to energy markets.
LSEG data showed that spot Brent has remained above $100 per barrel since September 3, while crude prices have gained approximately 30% from their early-August lows as uncertainty surrounding the conflict and global energy supplies persists.
Meanwhile, investors are closely monitoring oil demand in China, the world’s largest crude importer, after the country increased its purchases in recent weeks. Analysts at ING said that continued recovery in Chinese demand could amplify the impact of any additional supply disruptions and push oil prices higher, while weaker imports could limit further gains.
Oil prices are expected to remain volatile in the coming period as markets continue to assess the risk of a broader regional conflict and its potential impact on tanker traffic and global crude supplies.
Dollar Holds Near Three-Week Low
The U.S. dollar remained broadly stable during Thursday’s trading session, holding near a three-week low against a basket of major currencies, as the greenback remained under pressure from a stronger Japanese yen and declining U.S. Treasury yields. Investors are also awaiting key U.S. inflation data and upcoming central bank decisions next week.
The U.S. Dollar Index (DXY) traded near the 99 level after falling to a three-week low of approximately 98.630 in the previous session. The decline came as the Japanese yen continued to strengthen against the dollar, supported by growing expectations that the Bank of Japan could raise interest rates at its meeting next week.
Meanwhile, the euro remained close to a two-week high, trading around $1.1639, after reaching $1.1654 on Wednesday. Investors are awaiting the European Central Bank’s interest-rate decision, with markets assessing the potential impact of higher energy prices on inflation and monetary policy.
The dollar has faced additional pressure despite higher U.S. Treasury yields, as geopolitical tensions and rising oil prices have not generated the usual level of safe-haven demand for the U.S. currency. Analysts noted that changing market reactions to oil-related shocks have limited the dollar’s traditional safe-haven appeal.
Markets are also closely watching the release of the U.S. Producer Price Index (PPI) on Thursday, followed by the Consumer Price Index (CPI) report on Friday. The data could have a significant impact on expectations for the Federal Reserve’s monetary policy at its meeting scheduled for September 15–16.
The dollar’s performance in the coming period is expected to remain closely linked to the trajectory of U.S. inflation, interest-rate expectations at the Federal Reserve and the Bank of Japan, as well as developments in the Middle East and oil prices, all of which could contribute to increased volatility in global currency markets.
Looking Ahead
Markets are closely awaiting the release of the latest U.S. Initial Jobless Claims and Producer Price Index (PPI) data, as both indicators are expected to provide further insight into the strength of the labor market and the underlying inflationary pressures in the U.S. economy. The figures could influence expectations for the Federal Reserve’s monetary policy, particularly ahead of its upcoming meeting, and may trigger increased volatility across the U.S. dollar, Treasury yields, and gold markets.