Hormuz Optimism Eases Oil Price Concerns, Supports Gold

The global financial markets saw an uptick in optimism yesterday, driven by improved prospects for traffic through the Strait of Hormuz. This eased concerns about a potential supply shock, leading to lower oil prices and reduced inflation pressure.

Brent crude fell 5.3% to settle at $79.36 a barrel, while Nymex WTI dropped 5.7% to $75.77. The decrease in oil prices helped support Treasuries and gave gold a second channel of support through lower yields.

The U.S. Federal Reserve's stance on interest rates remains hawkish, with short-rate pricing leaning toward further tightening. However, the reduced urgency of a multi-hike scenario due to falling oil prices has calmed market expectations.