Unsettled Markets: These Three Assets Are Key!
This week, global markets moved in a clear "risk-off" pattern: oil rose aggressively, the dollar strengthened, while gold swung sharply but remained high. The main trigger was the escalation of the US-Israel-Iran conflict, which disrupted energy supplies and created a new risk premium in commodities, while simultaneously prompting investors to seek safe havens.
On the energy side, oil took center stage as supply disruptions were no longer just a threat but were beginning to become more tangible on export routes. Brent traded around $82.50/barrel and WTI around $75/barrel, supported by reports of infrastructure disruptions and shipping bottlenecks in the Gulf region. In these conditions, geopolitical factors trumped classic variables like stockpiles and demand data for short-term direction.
Supply pressures intensified as Iraq, a major OPEC producer, reportedly cut production by nearly 1.5 million barrels per day and warned of the potential for deeper cuts if exports did not recover. The market interpreted this situation as a multi-layered risk: not only did prices rise, but volatility also increased as storage capacity and alternative export routes were limited when key routes were disrupted.
The US dollar strengthened this week due to a classic crisis combination: safe-haven demand and inflation concerns stemming from the energy boom. Rising oil prices increase the likelihood of inflation sticking around for longer, thus reducing expectations of a Fed rate cut, providing additional support for the USD.
Gold exhibited two faces: it briefly corrected when the dollar and yields rose and portfolio liquidation occurred, but recovered when buyers stepped in at the bottom (dip-buying). Gold continues to hold a "risk premium" due to geopolitical factors, but its rise is not without obstacles, as the energy inflation scenario could hinder the scope for monetary easing, which is usually a positive factor for precious metals.
Outlook & predictions (silver–oil–gold–dollar): As long as the Hormuz disruption and escalation risks remain dominant, oil is likely to remain bullish but highly volatile (headline-driven). The dollar is likely to remain strong due to risk-off sentiment and markets holding back expectations of interest rate cuts. Gold has the potential to continue its recovery as a hedge, but the rally could be "shattered" if the USD and yields rise again. Silver tends to strengthen alongside gold, but is usually more volatile due to its sensitivity to USD/yield and industrial factors, so it can rise rapidly and correct sharply. (asd)
Source: Newsmaker.id
