US-Iran Tensions Worsen Oil Prices, Gold Dives Below $4,400
The US-Iran military conflict escalated over the weekend, causing a sharp rise in oil prices and a decline in gold. On Sunday, the US launched strikes against Iran's Larak Island in the Strait of Hormuz, targeting two rocket launchers. Brent crude oil surged over 3% to $90.98 during Monday's Asian trading session, while WTI crude jumped over 3% to $86.02.
The clashes between the US and Iran drove up shipping risks in the Strait of Hormuz, which carried nearly one-fifth of global oil shipments before the war broke out. The number of trackable commodity vessels passing through the strait dropped to about five per day over the weekend.
Gold prices also fell due to hawkish remarks by Federal Reserve Chair Warsh at the Jackson Hole symposium last week, which pushed US Treasury yields higher and weighed on gold prices. Spot gold briefly dropped below $4,400 today, hitting a low of $4,396.36.