Escalating tensions between the United States and Iran dominated global markets on Wednesday after President Donald Trump signaled the possibility of further military action.
Oil prices surged as investors assessed the risk of supply disruptions through the Strait of Hormuz.
Gold prices fell as higher energy costs fueled inflation concerns and strengthened expectations that the Federal Reserve could keep interest rates higher for longer.
Meanwhile, Bitcoin declined as traders reduced risk exposure amid geopolitical uncertainty, weakness in semiconductor stocks and the latest Fed meeting minutes.
Trump-Iran tensions raise fears of renewed conflict
President Donald Trump said the United States could launch additional strikes against Iran and suggested Washington may reimpose a blockade targeting Iranian ports, raising concerns that the conflict could escalate again.
Speaking on the sidelines of the NATO summit in Ankara, Turkey, Trump said the US had carried out major strikes overnight and indicated more military action was possible.
Earlier, the United States revoked a waiver that had allowed Iran to sell its oil globally after blaming Tehran for attacks on commercial vessels in the Strait of Hormuz.
Iran responded by warning of an “immediate response,” while its Foreign Ministry said US military action and restrictions on oil sales had rendered the interim peace agreement ineffective.
Both countries have accused each other of violating the memorandum of understanding that established a temporary truce and launched negotiations toward a broader agreement.
The US military said it struck more than 80 targets across Iran, including air defense systems, command networks and coastal radar sites.
Iran’s Revolutionary Guard Corps later said it had targeted US military bases in Bahrain and Kuwait.
Oil prices surge on renewed supply concerns
Crude oil prices climbed sharply after Trump’s comments increased fears that renewed fighting could threaten energy supplies moving through the Strait of Hormuz.
Brent crude rose about 5.5% to $78.25 a barrel, while US West Texas Intermediate gained 4.7% to $73.75.
The move put both benchmarks on track for their biggest daily percentage gains since April.
Before the conflict, roughly one-fifth of global oil supplies passed through the Strait of Hormuz, making any disruption to shipping a major concern for energy markets.
The rally gathered additional momentum after Russia announced a ban on diesel exports following Ukrainian drone attacks on Russian refineries, tankers and pipeline infrastructure.
US ultra-low sulfur diesel futures surged more than 14%, while refining margins reached record highs, according to LSEG data.
Gold falls as inflation worries outweigh safe-haven demand
Gold prices declined even as geopolitical tensions intensified, as investors focused on the inflationary impact of rising energy prices and the possibility of higher US interest rates.
Spot gold fell 0.66% to $4,078.73 an ounce, while August gold futures settled 1.4% lower at $4,097.20.
Higher oil prices have increased concerns that inflation could remain elevated, reducing expectations for lower interest rates.
While gold is traditionally viewed as a hedge against inflation, higher interest rates reduce the appeal of non-yielding assets.
The decline also followed the release of Federal Reserve minutes showing that policymakers remained concerned about inflation, with some officials seeing a case for additional rate hikes.
According to CME FedWatch data, traders are pricing in about a 69% probability of a US rate hike in September, up from 62% a day earlier.
Bitcoin slides as traders cut risk exposure
Bitcoin traded above $62,000 but declined nearly 2% over the past 24 hours as investors reduced exposure to risk assets amid geopolitical tensions and weakness across AI-related technology stocks.
Market data showed traders shifted from aggressive buying earlier in the week to widespread selling on Wednesday.
Futures cumulative volume delta swung to nearly $500 million in selling, while spot markets recorded approximately $86 million in net selling.
Funding rates and open interest also declined as traders reduced positions, although funding remained positive over the past week.
Liquidation data showed forced selling was concentrated on long positions, with roughly $47 million in long liquidations compared with about $4 million in short liquidations.
Analysts noted that a large concentration of long positions remains near the $61,000 level, which could increase selling pressure if Bitcoin falls further.
The post Evening digest: US Iran tensions lifts oil, Bitcoin dips appeared first on Invezz
