Amidst volatile geopolitical tensions, the fragility of last week's Middle East ceasefire agreement and the impending release of US inflation data fueled a rebound in gold prices on Thursday (April 9th), highlighting how the current international uncertainty is profoundly impacting commodity pricing logic.

The US-Iran ceasefire agreement brokered by the Trump administration appears to have brought an end to the six-week conflict, but cracks have quickly emerged. Israel's massive airstrikes on targets in Lebanon, resulting in over 300 deaths, directly threaten the agreement's sustainability. Iran has made it clear that the ceasefire must include Lebanon and emphasized that it will not tolerate any attacks; further, strong statements from Iran's Supreme Leader have exacerbated market tensions.

The situation regarding the Strait of Hormuz is particularly critical. This strait handles approximately one-fifth of the world's oil and liquefied natural gas transport; however, in the initial 24 hours after the ceasefire, only a small number of ships passed through, far below the pre-war average of 140 ships per day. Iran's assertion of control by warning ships against entering its territorial waters has led to the most severe disruption to global energy supplies in history.

In summary, the gold market is currently at a crossroads between geopolitical risks and macroeconomic data. A rebound in the US dollar may suppress gold prices in the short term; conversely, if there are substantial signs of easing tensions in the Middle East, gold is expected to regain upward momentum.

Faced with the complex economic challenges brought about by the Middle East wars, IMF Managing Director Kristalina Georgieva reminded central banks that they must carefully balance controlling inflation with protecting economic growth when dealing with potential long-term energy price shocks. Her statement indicates that the global economy is currently at a critical crossroads: on the one hand, it must be wary of a resurgence of inflation risks; on the other hand, it must prevent overly tight policies from excessively suppressing demand. Only through the combined efforts of fiscal and monetary policies can the global economy smoothly navigate this period of uncertainty.

Last Week's Market Performance Review:

Last week, US stocks were mixed, with the S&P 500 closing slightly lower, but major indices still recorded strong weekly gains as traders continued to focus on the fragile two-week ceasefire agreement between the US and Iran. The S&P 500 fell 0.11% to close at 6816.89; the Nasdaq Composite rose 0.35% to close at 22902.89, boosted by gains in key semiconductor stocks such as Nvidia and Broadcom; and the Dow Jones Industrial Average fell 269.23 points, or 0.56%, to close at 47916.57. Nevertheless, the S&P 500 rose approximately 3.6%, the Nasdaq rose approximately 4.7%, and the Dow rose approximately 3%. All three major indexes recorded their best weekly performance since November of last year.

Gold prices are on track for a third consecutive weekly gain, as hopes for a diplomatic solution to the war with Iran and continued gold purchases by central banks offset persistent risks surrounding inflation. With key issues in the Middle East conflict remaining unresolved, market focus shifts to weekend negotiations in Islamabad—where a delegation led by US Vice President Vance will meet with Iranian officials. Gold closed at $4,750 per ounce before the weekend.

Silver prices rose to $75.670 an ounce, on track for a third consecutive weekly gain, driven by a weaker dollar and investor focus on diplomatic talks between the US and Iran in Islamabad. The metal rose more than 4% this week, further supported by expectations of an earlier and larger US interest rate cut, which boosted demand for non-yielding assets. A two-week ceasefire agreement between the US and Iran helped oil prices fall sharply, easing concerns about recovering inflation.

Against the backdrop of impending permanent ceasefire talks between the US and Iran in Islamabad, Pakistan, on Saturday, the dollar index fell 1.6% last week to close at 98.70, its biggest weekly drop since January. In March, the dollar had risen strongly as one of the few safe-haven assets, when the situation in Iran caused oil prices to surge, stocks and gold to fall, and inflation concerns pressured the bond market.

The euro rose 1.8% against the dollar this week to 1.1722, supported not only by a weaker dollar but also by the continued rise in expectations of a European Central Bank (ECB) rate hike. The market has already fully priced in the ECB's expectation of two 25-basis-point rate hikes by the end of 2026. European Central Bank (ECB) Governing Council member Winsch explicitly stated that if the war with Iran continues, the ECB may need to raise interest rates, and he did not rule out taking action as early as April 30. Among major currencies, the yen was the weakest performer. The yen fell to 159.25 yen against the dollar on Friday, recovering only slightly from its lows, and was sold off against other currencies. The yen has been suppressed by Japan's low interest rates in recent years, and recently, its heavy reliance on Middle Eastern fuel imports has made it vulnerable to soaring oil prices—high oil prices worsen the trade balance and weaken the yen's attractiveness.

The pound maintained its constructive view against the dollar, hovering around 1.3470 over the weekend. The pound's continued rise against the dollar benefited from the dollar's several-day decline, as investors continued to assess the latest developments in the US-Iran ceasefire. The pound rose 2% to $1.347. The risk-sensitive Australian dollar rose even more, nearly 3% to 0.7070. This movement clearly indicates that investors are betting that the ceasefire in the Gulf region will last and oil shipments will gradually resume, thus abandoning the previously frantically bought dollars.

WTI crude oil closed at $90.40 on Friday. The market focused on the permanent ceasefire negotiations between Iran and the United States in Pakistan ahead of the weekend. Oil prices fell this week as the US-Iran temporary ceasefire and the negotiations for a permanent ceasefire progressed. Brent crude oil prices fell by 12.7%, marking the largest weekly drop since August 2022; WTI crude oil prices fell by a significant 13.0% this week, the worst weekly performance since the COVID-19 lockdowns in April 2020.

Last week, Bitcoin fell back to $71,843 after its third attempt to break through $73,000 was met with selling pressure on Thursday. This price level has acted as significant resistance in every rebound since the conflict with Iran began in late February. However, the pullback was relatively limited. Due to the fragile ceasefire situation in Iran and the partial reopening of the Strait of Hormuz, the market remained cautious, and oil price volatility continued to increase. Bitcoin surged 7.9%, marking its best weekly performance since the outbreak of the war, and continues to trade above its 50-day moving average, which has turned upward for the first time since the conflict began.

The yield on the 10-year US Treasury note rose slightly to 4.31% on Friday, recovering slightly from a three-week low hit in the previous session, as investors continued to focus on developments in the Middle East and assess the latest data. US and Iranian delegations are scheduled to meet in Pakistan on Saturday, while Israel has agreed to negotiations with the Lebanese government, boosting hopes for de-escalation in the region. Investors currently believe the likelihood of another Federal Reserve rate cut in 2026 is extremely low, and many economists still maintain their forecasts for one or more rate cuts later this year.

Market Outlook for This Week:

This week (April 13-17), the first round of US-Iran talks will kick off a major geopolitical game, with representatives from multiple countries gathering in Islamabad for high-level consultations. The outcome of the negotiations is expected to be revealed this week. Meanwhile, the world will be releasing a flurry of important economic data and central bank policy signals. From China's Q1 GDP to inflation data in Europe and the US, from pronouncements by central bank officials to international financial summits, every development could trigger significant market volatility. Investors need to plan ahead to mitigate potential risks and opportunities.

The first round of talks between Iran and the US began in Islamabad, Pakistan, and representatives from multiple countries will hold high-level geopolitical consultations there this weekend. Sources say the direct talks may "last only two to three days at most due to security concerns, with the outcome to be announced next week."

On Monday (April 13), the International Monetary Fund (IMF) and the World Bank will hold their Spring Meetings, bringing together global financial experts to discuss global economic issues until April 17.

Midweek will be packed with policy announcements, including speeches from the Governor of the Bank of England, President Christine Lagarde of the European Central Bank, and several US regional Federal Reserve presidents. The market should pay close attention to signals regarding monetary policy moves in various countries.

Regarding risks this week:

Geopolitical and policy variables require close attention.

Besides core economic data, investors should be wary of four potential risks:

First, slower-than-expected progress or a breakdown in US-Iran negotiations could escalate geopolitical tensions in the Middle East, boosting risk aversion and benefiting safe-haven assets such as gold and the US dollar.

Second, signals from central banks such as the Bank of Japan's interest rate hike expectations and the Federal Reserve's policy direction could quickly correct market expectations, causing sharp short-term fluctuations in exchange rates and bond markets.

Third, deviations from market expectations in Chinese economic data or renewed international trade frictions could suppress global risk asset sentiment.

Fourth, unexpected changes in crude oil inventories combined with geopolitical factors could lead to significant fluctuations in commodity prices.

This week's conclusion:

The direct US-Iran talks in Islamabad are a key variable in the direction of the foreign exchange market. A positive outcome would be unfavorable for the US dollar and oil prices. However, if by next Monday the talks are unsuccessful and ships remain scarce, the situation could quickly reverse.

Currently, market pricing implies a higher probability of some form of agreement, thus putting downward pressure on the US dollar. However, Iran threatened a "devastating strike" against US and Israeli targets if an agreement in its interests was not reached before the negotiations. This created a high degree of uncertainty regarding the outcome of the talks.

Market participants generally believe that the market is currently overly optimistic, and any news of a breakdown in negotiations would trigger a violent rebound in the US dollar. Furthermore, shipping through the Strait of Hormuz has not yet resumed, and the global daily transport of approximately 20 million barrels of oil remains disrupted, a stark contrast to the optimistic expectations in the currency market.

US and Iran reach a two-week temporary ceasefire agreement: Oil prices plummet, stock markets soar, the dollar falls, and gold prices surge, causing global market turmoil.

At the most critical moment in the six-week-long Middle East conflict, US President Trump announced last week a two-week temporary ceasefire agreement with Iran, accepting Iran's 10-point ceasefire terms as the basis for negotiations. The agreement was brokered by Pakistan, and the two sides will begin formal negotiations in Islamabad on Friday. The six-week-long conflict, which has claimed over 5,000 lives, triggered a sharp drop in global markets upon the ceasefire announcement. US crude oil prices plummeted by over $20, stock futures surged by over 2%, the dollar index fell below 100, and gold prices soared by over 2%. However, Iran maintains its insistence on dominance over the Strait of Hormuz, and the outcome of negotiations over the next two weeks will determine whether the Middle East can achieve true peace.

A Dramatic Agreement Reached on the Brink of Crisis

US President Trump issued a statement via Truth Social, clearly stating that he had agreed to a two-week bilateral ceasefire agreement with Iran. Trump emphasized that the core condition of this agreement, brokered by Pakistan at the last minute, was Iran's agreement to suspend the blockade of oil and gas supply routes through the Strait of Hormuz. Trump also pointed out that Iran's 10-point proposal constituted a "workable basis" for negotiations and expected that a final agreement could be finalized and completed during the two-week ceasefire.

Iran reacted swiftly. Iranian state television broadcast a statement declaring that Trump had accepted Iran's ceasefire conditions, describing it as a "humiliating concession" by the US president. Iran's Supreme National Security Council subsequently released the main contents of the 10 ceasefire terms submitted to the United States through Pakistan. The two sides plan to begin formal negotiations on Friday (April 10) in Islamabad, the capital of Pakistan.

Core Contents of Iran's 10 Ceasefire Terms

The statement from Iran's Supreme National Security Council detailed the ceasefire terms, which aim to end the conflict through diplomatic means and safeguard Iran's core geopolitical and economic interests. Specifically, the main contents include: Controlled passage through the Strait of Hormuz, coordinated with the Iranian armed forces, to ensure the stability and security of this strategic waterway; an end to the war against all resistance forces in the region; a complete withdrawal of US combat troops from all bases and deployments in the region; the establishment of a safe passage agreement for the Strait of Hormuz, clearly defining Iran's dominant position; full compensation for losses suffered by Iran in the conflict, based on estimates; the lifting of all primary and secondary sanctions, and the revocation of relevant resolutions of the International Atomic Energy Agency and the UN Security Council; the unfreezing of all frozen Iranian overseas assets and property; and finally, the adoption of a binding UN Security Council resolution approving all the above provisions, making them part of international law.

The US accepted these principles as the basis for negotiations. These provisions not only involve a military ceasefire but also touch upon deeper issues such as the lifting of sanctions, the unfreezing of assets, and regional security arrangements, demonstrating Iran's intention to reshape the geopolitical landscape of the Middle East through this agreement.

The fierce confrontation and heavy costs before the ceasefire

The situation deteriorated sharply before the agreement was reached. As Trump's deadline approaches, the US-Israeli military strikes against Iran continue to escalate. Railway and highway bridges, an airport, and a petrochemical plant have been attacked, and the US military has also conducted precision strikes on key Iranian oil export terminals on Kharg Island. Iran swiftly responded, announcing it would no longer hesitate to strike infrastructure in its Gulf neighbors and launched a new round of operations against a ship in the Gulf region and a large Saudi petrochemical facility. Witnesses in Doha, the capital of Qatar, reported hearing loud explosions late at night.

The conflict has not only resulted in numerous casualties but also caused severe damage to regional infrastructure and severely disrupted the global energy supply chain.

Meanwhile, domestic political pressure in the United States continues to build. Trump's approval rating has plummeted to a historic low, and with the midterm election campaign heating up, his Republican Party faces the risk of losing control of Congress. Multiple polls show that a majority of Americans oppose the war and are strongly dissatisfied with the resulting increase in gasoline prices.

Global markets experienced a sudden and dramatic shift: oil prices plummeted, stock markets soared, the dollar fell, and gold prices surged.

The news of the ceasefire agreement quickly eased market concerns about the Middle East situation, triggering a significant reaction in financial markets. US crude oil prices plunged, falling by approximately 19.35%, hitting a more than one-week low. Market concerns about inflation eased significantly, with the dollar index hitting a two-week low, falling by about 0.82%. US stock index futures surged by over 2%, reaching a three-week high, and non-US currencies generally strengthened. Spot gold prices also rose by over 2%, briefly hitting a more than two-week high of $4,865 per ounce.

This author interprets this market upheaval. Trump's move clearly indicates that he is actively seeking an opportunity to withdraw from the conflict with Iran, and his previous series of tough statements often serve as a strategic turning point before diplomatic negotiations, helping to secure more favorable negotiating terms at the last minute.

While this is the first substantial ceasefire since the start of hostilities, and the market may see a degree of cautious optimism, investors must remain vigilant. The sustainability of the ceasefire agreement has not been fully validated, and the risk of renewed conflict could quickly arise if either side adopts a hardline stance in subsequent negotiations. The severe damage to infrastructure will require a lengthy repair process; even if the conflict eases in the short term, the full recovery of the global energy supply chain will take weeks or even months. Oil prices are unlikely to quickly fall back to pre-conflict lows, which will have a complex impact on global inflation trends and central bank monetary policies.

However, this temporary ceasefire provides a valuable window of time for emergency replenishment of energy reserves, gradual mitigation of the economic shock, and initial stabilization of the global supply chain. If the ceasefire can be successfully maintained and ultimately evolve into a lasting political solution, it will greatly contribute to the orderly recovery of oil and gas exports from the Gulf region, thereby effectively stabilizing international energy market supply, alleviating inflationary pressures caused by high energy prices, and injecting new momentum into global economic growth. The bond market subsequently strengthened, and the positive performance of the stock market further boosted investor confidence, demonstrating a positive response from the capital markets to the easing of tensions in the Middle East. However, in the long run, core issues such as the passage mechanism through the Strait of Hormuz, the actual implementation of sanctions lifting, and regional security arrangements will remain key variables determining market trends.

Iran's Clear Stance on the Strait of Hormuz

Despite the temporary ceasefire, the Iranian government continues to signal its intention to maintain control over the Strait of Hormuz. Iranian Foreign Minister Abbas Araghchi stated on social media platform X that safe passage through the Strait of Hormuz will be possible within two weeks, after coordination with the Iranian armed forces and full consideration of technical limitations.

In another statement, Iran's Supreme National Security Council reiterated that its peace agreement plan includes regulating passage through the strait under the coordination of the Iranian armed forces, thereby granting Iran a unique economic and geopolitical status. Trump has repeatedly emphasized that the maintenance of the ceasefire agreement depends on Iran reopening the strait.

Conclusion:

A Fragile Peace and Unresolved Geopolitical Challenges

The two-week ceasefire agreement reached between Trump and Iran undoubtedly injected a glimmer of hope for easing the ongoing tensions in the Middle East. This agreement not only temporarily halted further escalation of the conflict but also created conditions for both sides to resolve their core differences through negotiations. However, Iran's insistence on its dominance over the Strait of Hormuz, and the significant differences between the two sides on issues such as troop withdrawal, sanctions lifting, and compensation, mean that future negotiations in Islamabad will remain challenging.

Currently, global attention is focused on the formal negotiations that will begin this weekend and whether the ceasefire agreement can truly translate into a long-term, stable peace. Against the backdrop of complex global energy security and geopolitical competition, this sudden diplomatic shift may only be a new starting point in the Middle East peace process, and its final outcome remains to be seen.

Four Major Changes to Reshape the Financial Landscape in 2026

Geopolitical conflicts will push up oil prices by 57% in 2026; private lending is already experiencing a wave of redemptions; bank regulation will exacerbate liquidity pressures; and the AI ​​storm—a list of four major risks for global markets this year that investors should be wary of.

At this special juncture in 2026, the 250th anniversary of the founding of the United States, amidst global turmoil, I have attempted to systematically outline the core risks currently facing the market, while simultaneously calling for maintaining global confidence in dollar assets and the financial system through core American values—a statement that itself reflects the deep concern of top investment banks regarding the current market uncertainty.

Primary Risk: Systemic Impact of Geopolitical Conflict

Geopolitical tensions are listed as the "number one systemic risk," with war explicitly stating that it is "the biggest source of uncertainty in global financial markets."

The core concerns focus on two major battlefields: the ongoing and brutal conflict in Ukraine and the spread of the war in Iran in the Middle East. Both will impact financial markets through three channels: commodity pricing, global supply chain restructuring, and cross-border capital flows.

The impact of the current war in Iran is particularly direct: the conflict has caused international oil prices to surge by over 57% compared to pre-war levels, the Strait of Hormuz, a crucial passage carrying 30% of the world's seaborne crude oil, faces a navigation crisis, directly pushing up the geopolitical risk premium in the energy market (accounting for over 25%), and triggering chain reactions in the foreign exchange and stock markets.

The trajectory of such geopolitical events is highly likely to reshape the future global economic order and financial landscape. Its spillover effects extend beyond the energy sector, impacting global asset pricing logic through inflation transmission and shifts in risk aversion.

Furthermore, the "restructuring of global economic relations" triggered by US trade policies has also exacerbated market volatility.

The Trump administration made tariffs a core policy of its second term, imposing high tariffs on dozens of trading partners, directly escalating global trade frictions and leading to increased costs of cross-border trade financing and heightened exchange rate volatility.

While some trade adjustments aim to safeguard national security and supply chain resilience, the long-term impact of this trade restructuring on exchange rate trends, cross-border investment flows, and global economic growth remains difficult to predict precisely. Its impact on multinational corporation profits and the stability of emerging markets warrants attention.

Regulatory Controversy: Unreasonable Rules May Exacerbate Liquidity Pressures

As core participants in the financial industry, they strongly question the current banking regulatory framework, arguing that some policies "lack practical financial logic" and may actually weaken market stability. The criticism focuses on two key regulatory proposals: the Basel III Final Resolution (an upgraded version of the "Safe Operations Guidelines" for global banks) and additional capital requirements for Global Systemically Important Banks (GSIBs) (such as the additional reserve requirements for banks the size of JPMorgan Chase).

When JPMorgan Chase lends to American citizens and businesses, it must set aside up to 50% more cash that it cannot touch compared to smaller banks.

This different requirement for large and small banks not only reduces the amount of money large banks can lend and compresses their profit margins, but it may also make it harder for the real economy (such as factories expanding production or small shops opening branches) to obtain loans, affecting the normal flow of funds in the market.

This differentiated requirement not only directly compresses banks' lending capacity and profit margins, but may also suppress productive credit needed by the real economy, affecting the efficiency of market capital circulation.

Furthermore, the irrationality of market capital and liquidity requirements, the structural flaws in the Federal Reserve's stress testing framework, and the Federal Deposit Insurance Corporation's "mishandling" of the process—these problems have collectively created a "fragmented, inefficient, and rigid regulatory system." While initially intended to prevent risk, in practice, this system has become redundant and overlapping, ultimately weakening the financial system's resilience. This warrants high vigilance from regulators and market participants.

Private Market: The Risk of Liquidity Crisis Transmission Emerges

The potential risks and volatility in the current private lending market have begun to spread to the public market.

The core contradiction stems from the structural flaws in the private lending industry: a general lack of transparent valuation systems and standardized information disclosure mechanisms; and highly subjective "marking" of loan asset valuations. This makes it easy for market panic to trigger irrational selling, even if the actual default rate of the underlying assets has not substantially deteriorated.

Currently, private lending funds have experienced a large-scale redemption wave due to increased investor concerns about the quality of credit assets related to software companies.

The actual losses in the current private lending market have exceeded the reasonable level corresponding to the macroeconomic environment. Rising credit risk premiums may trigger credit tightening, thereby affecting SME financing and the recovery of the real economy.

More alarmingly, insurance regulators are likely to introduce stricter rating standards and asset write-down requirements, directly increasing the capital replenishment pressure on private lending institutions and potentially further tightening market liquidity, creating a negative cycle of "redemption wave—liquidity tightening—credit contraction."

Artificial Intelligence: Uncertainty Game Amidst Disruptive Opportunities

Unlike warnings about traditional risks, the market's attitude towards artificial intelligence presents a dialectical perspective of "opportunities and risks coexisting."

The industrial application of artificial intelligence is progressing far faster than any previous technological innovation, and its impact on the financial industry is disruptive—JPMorgan Chase has already deployed AI technology across its entire business chain, optimizing transaction processes and risk pricing models through agent-based AI to create incremental value for core trading businesses such as foreign exchange and fixed income, while simultaneously driving employee skills restructuring and job reassignment.

However, its uncertainties have not been ignored: From a financial investment perspective, AI deployment is not a short-term speculative hotspot. While its long-term benefits are clear, the market has not yet been able to clearly predict the competitive landscape and profit distribution mechanism of the related industry chain. The winners and losers within the industry remain to be seen.

More importantly, such disruptive technological changes often trigger second- and third-order chain reactions. Their profound impact on global financial market rules, regulatory frameworks, and socio-economic structures still requires close monitoring and analysis by market participants. Blind optimism is unwarranted (it implies that the full development of AI will lead to a partial industry shakeout, with large financial groups benefiting and increased industry concentration).

Key Risk Warnings from an Investment Banking Perspective

Given that the global financial market is currently at a critical juncture with multiple intertwined risks, investors need to focus on four core variables: the extent of the spread of geopolitical conflicts (especially the conflict in Iran and the situation regarding navigation in the Strait of Hormuz), the final implementation of banking regulatory policies, changes in liquidity in the private lending market, and the pace of evolution of artificial intelligence technology.

For market operations, investors should be wary of increased asset volatility caused by geopolitical risks and rationally allocate safe-haven assets and commodity-related targets;

Pay attention to the impact of regulatory policy adjustments on bank stocks and the credit market, and avoid financial institutions with significant capital pressure;

Maintain caution regarding private market products, emphasizing valuation transparency and liquidity security; when investing in AI-related products, it is necessary to consider both long-term trends and short-term uncertainties, and avoid chasing high prices for speculation.

Conclusion:

Therefore, in an environment of increasing volatility, only by clearly identifying core risks and establishing flexible response mechanisms can one seize opportunities amidst uncertainty. This logic holds significant reference value for all types of market participants.

Easing Geopolitical Tensions and a Weakening US Dollar Index Drive Gold's Continued Rebound

Despite a temporary easing of tensions in the Middle East, just before the deadline in the US Eastern Time Zone, US President Trump suddenly announced on the social media platform "Truth Social" that he had agreed to suspend bombing and military strikes against Iran for a full two weeks. This bombshell news acted like a "peace bomb," quickly shattering market anxieties about the Middle East tensions, causing significant volatility in global financial markets. Oil prices plummeted by over $20 in a short period, while gold prices rebounded strongly by over 2%, reaching a more than two-week high. This attracted some funds to reallocate; the current rise in gold prices is not only driven by safe-haven demand but also by inflation expectations and policy uncertainty.

Iran Restores Passage Through the Strait of Hormuz

From the perspective of the event's background, this ceasefire arrangement comes with a condition: Iran must restore passage through the Strait of Hormuz, and further negotiations will be held in Pakistan. This news has alleviated market concerns about energy supply disruptions to some extent, but it has not completely eliminated uncertainty. The Strait of Hormuz handles approximately 20% of global maritime energy transport, and its operational status remains a core variable of market attention.

Gold is Considered an Important Asset for Hedging Against Inflation

Meanwhile, the previous sharp rise in oil prices has driven up global energy costs. Rising energy prices often push up inflation expectations through transmission mechanisms, thus supporting gold. As gold is considered an important asset for hedging against inflation, its demand typically increases during periods of rising price pressure. This is one of the key reasons why gold has maintained its high level despite the current easing of risks.

Energy shocks may prolong the inflation decline cycle, which will limit the room for central bank interest rate cuts, thus indirectly affecting gold prices.

Inflation and Uncertainty Support Gold Prices

From a macroeconomic perspective, the market is reassessing the Federal Reserve's policy path. Inflationary pressures from rising energy prices limit the scope for monetary policy easing. Market research indicates that the market currently expects a 40% probability of an interest rate cut this year. This uncertainty creates a complex interplay between interest rates and safe-haven demand for gold. On one hand, a high-interest-rate environment weakens gold's appeal; on the other hand, inflation and uncertainty support its price.

Furthermore, market risk sentiment has not fully stabilized. Although the short-term ceasefire has eased tensions, the outcome of the negotiations remains highly uncertain. If the situation deteriorates again, safe-haven funds could quickly flow back into the gold market, pushing prices further up. Therefore, the current gold price movement exhibits a clear "dual-drive structure," with safe-haven demand and inflation expectations working together.

Gold Remains in a Strong Upward Channel

From a technical perspective, the daily chart shows that gold remains in a strong upward channel, with prices maintaining high levels and the overall trend intact. Key support lies in the $4,700 area, which is the lower edge of the recent trading range; resistance is concentrated around $4,900, and a successful break above this level could open up further upside potential. From a momentum perspective, bullish forces still dominate, but upward momentum has slowed somewhat.

Overall, gold is currently at a critical juncture due to a confluence of macroeconomic variables. While safe-haven demand has cooled somewhat, it hasn't disappeared entirely, and inflation expectations continue to provide support, keeping prices within a high range.

Conclusion:

The core driver of this round of gold price increases has shifted from a single safe-haven logic to a dual structure of "inflation expectations + policy uncertainty." Although the short-term easing of tensions in the Middle East has weakened some safe-haven demand, inflationary pressures from rising energy prices have provided new support for gold. Future price movements will depend on two key variables: whether the geopolitical situation remains stable and whether the Federal Reserve's policy shifts towards explicit easing. Under the influence of multiple factors, gold may maintain high-level fluctuations in the short term, but it still possesses upward potential in the medium to long term. However, the risk of a pullback due to changes in interest rate expectations should be closely monitored.

Geopolitical tensions ease, has oil price peaked?

US President Trump announced a two-week suspension of military action against Iran last week, quickly easing market risk aversion and pushing WTI crude oil prices down more than 15% from their highs to around $90, marking the largest single-day drop since the start of the conflict. Although short-term risk premiums have been significantly released, the market remains cautious about the subsequent recovery of supply due to disruptions to Middle Eastern supply chains and uncertainties surrounding the reopening of key shipping routes. Future oil price movements will depend on the progress of the ceasefire and the actual recovery of supply.

In fact, the market had already priced in the suspension of action, so when the news was released, oil prices experienced a more accelerated decline than a one-sided shock.

Oil prices had already been declining intraday before the news.

Even before the official announcement, oil prices had been declining intraday. Market participants gradually reached a consensus that the policy stance might again involve an "extension of the deadline." In previous similar events, strong statements were often accompanied by policy easing near the deadline, causing funds to position themselves in risk assets in advance, pushing energy prices back to their previous gains.

Meanwhile, risk appetite rebounded significantly, with US stock futures rising in tandem. S&P 500 futures and Nasdaq futures also rose, reflecting a marked decrease in market concerns about escalating conflict. This cross-asset correlation further intensified downward pressure on the crude oil market.

The core of this round of oil price increases lies in supply-side shocks.

From a supply and demand perspective, the core of this round of oil price increases lies in supply-side shocks. During the tense situation in the Middle East, shipping through the Strait of Hormuz was disrupted, significantly impacting the global energy market. The Strait of Hormuz handles approximately 20% of global seaborne crude oil transportation, and its temporary restrictions are considered by the market as one of the most severe supply shocks in recent years. Some institutions estimate that by the end of April, the world may have lost nearly 1 billion barrels of crude oil and refined product supply.

Although current prices have clearly fallen, WTI crude oil is still up about 55% compared to pre-conflict levels, indicating that the market still retains a certain risk premium. This is mainly due to two factors: first, the ceasefire is only a temporary arrangement, and significant differences remain between the two sides; second, infrastructure has been severely damaged, and even if a long-term agreement is reached, supply recovery will take time.

Even if the ceasefire proceeds smoothly, production recovery may lag by several months, making it difficult to fully fill the short-term supply gap.

The forward price structure already reflects some expectations of a decline.

From a market perspective, the current forward price structure already reflects some expectations of a decline. The market generally expects that if the ceasefire continues, the central oil price may gradually shift downwards. However, at the same time, the market remains highly dependent on the actual recovery of shipping, not just policy signals. If shipping in the Strait of Hormuz cannot return to near normal levels, oil prices will still be supported.

From a technical perspective:

From a technical perspective, after a rapid rise, oil prices have entered a high-level consolidation phase and have now fallen back to near a key support area. The key support levels are $85.85 (the double bottom of March 24th and 25th) and $85.55 (the 35-day moving average). A decisive break below these levels could trigger a trend sell-off, further opening up downside potential. Resistance is concentrated around the $100 area, a level that has previously suppressed price rebounds multiple times. From a momentum perspective, upward momentum has clearly weakened, and the market has entered a rebalancing phase after the release of pent-up emotions.

The current market contradiction lies in the interplay between sentiment and fundamentals.

The core contradiction in the current market lies in the interplay between sentiment and fundamentals. On the one hand, the short-term ceasefire has eased risk premiums; on the other hand, the uncertainty surrounding supply recovery limits the potential for a deep decline in oil prices. Therefore, after the sentiment gradually dissipates, the market will return to the logic of supply and demand fundamentals, and volatility may remain high in the short term.

Conclusion:

Overall, the recent sharp decline in oil prices was mainly driven by the temporary easing of geopolitical risks, essentially representing a rapid release of risk premiums. However, from a medium- to long-term perspective, the uncertainty surrounding supply-side damage and the recovery of key transportation routes will continue to provide significant support for oil prices. In the short term, oil price movements will fluctuate repeatedly around the progress of ceasefire negotiations, and if negotiations break down or transportation recovery falls short of expectations, the market may re-price risks, pushing prices upward again. Going forward, investors need to focus on the actual recovery of supply and changes in inventory, which will determine whether oil prices enter a downward cycle or maintain a high-level consolidation pattern.

Overview of Key Overseas Economic Events and Matters This Week:

Monday (April 13): New Zealand March BNZ Services Performance Index; US March Existing Home Sales (Annualized, in thousands); Bank of Japan Governor Kazuo Ueda speaks; OPEC releases monthly oil market report.

Tuesday (April 14): Australia's ANZ Consumer Confidence Index for the week ending April 12; US March PPI (Year-on-Year); IEA releases monthly oil market report.

Wednesday (April 15): Japan's April Reuters Tankan Non-Manufacturing Index; US April New York Fed Manufacturing Index; US March Import Price Index (Month-on-Month); US EIA Crude Oil Inventory Change for the week ending April 10 (in thousands of barrels); Bank of England Governor Bailey participates in a panel discussion at Columbia University.

Thursday (April 16): Australia's March Seasonally Adjusted Unemployment Rate (%); Australia's March Employment Change (in thousands); UK February GDP (Month-on-Month); UK February Industrial Production (Month-on-Month); UK February Seasonally Adjusted Trade Balance (£ billion); Eurozone March Harmonized CPI YoY - Final Unadjusted (%); US Initial Jobless Claims for the Week Ending April 11 (thousands); US April Philadelphia Fed Manufacturing Index; Fed Governor Bowman speaks at the Institute of International Finance Forum

Friday (April 17): Eurozone February Seasonally Adjusted Trade Balance (€100 million); UK April CBI Retail Sales Balance; Canada March Housing Starts (thousands of units)

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