Hormuz Tensions Spark Risk-Off Volatility as Iran Awaits US Response

A proposed seven-day plan to reopen the Strait of Hormuz and other demands from Iran has been met with skepticism by US President Donald Trump, who expects talks to resume this week. Iran's military commander said the country is ready to keep fighting, while Tehran stated it would not soften its conditions for reopening the waterway.

The Strait of Hormuz handles approximately 20.5 million barrels of oil per day, roughly 20% of global liquid petroleum consumption. As tensions escalate, markets are bracing for a 'risk-off' phase, with long-volatility options strategies and safe-haven flows becoming increasingly important.

Gold prices have surged during Middle East conflicts, reaching record highs above $2,600 an ounce amid global instability. To prepare for the coming weeks, it's advised to prioritize buying call options on Gold (GC) and securing long positions on the US Dollar Index (DXY) as a buffer against equity market drops.