Gold Faces Rate-Hike Risk Amid US-Iran Conflict Tensions

The US-Iran conflict has led to increased tensions in the Strait of Hormuz, with oil prices surging as market anxiety flared. According to a report by the Wall Street Journal, the Trump administration has told mediators it has no interest in returning to the June memorandum of understanding with Iran, leaving diplomats without a framework to restart talks on reopening the Strait.

Iran's Islamic Revolutionary Guard Corps (IRGC) made clear that its position is equally rigid, stating that if the US stops obstructing and returns to the memorandum of understanding, it can open the Strait within the framework of the agreement reached. However, conservatives in Tehran have interpreted Paragraph 5 of the June MOU as codifying Iran's authority to set terms for strait access.

The impasse has paralyzed a week of intensive shuttle diplomacy, with Oman's foreign minister attempting to finalize a transit-lane agreement that was meant to serve as a stepping stone toward broader reopening talks. However, this effort has stalled, with Iran pushing for changes that would give it greater control over traffic.