Trump Rejects Iran Truce Extension, Sends Gold and Oil Soaring
US-Iran tensions escalated as President Donald Trump rejected an extension of a June truce agreement. The move weakened prospects for a US-Iran peace deal, which had been intended to provide a 60-day window for Washington and Tehran to negotiate a longer-term peace deal.
The gold price rose as a weaker dollar and reduced Federal Reserve rate-hike expectations supported demand for the precious metal. Spot gold gained 0.94% to $4,417.14 an ounce, while US gold futures settled 0.85% higher at $4,475.00.
Oil prices climbed due to uncertainty over the Strait of Hormuz, with Brent crude settling $2.24, or 2.53%, higher at $90.76 a barrel, and West Texas Intermediate gaining $2.18, or 2.65%, to $84.58. The gains came after attacks on vessels in the Strait of Hormuz raised concerns about global supply disruptions.
Bitcoin recovered toward $64,000 as investors weighed geopolitical tensions and increasingly crowded long positions in derivatives markets. However, funding rates reached a 20-month high of 0.022 on August 14, indicating that traders were increasingly positioned long.