Futures linked to the main U.S. averages ticked higher on Monday, while oil continued to climb, as investors assessed ongoing fighting in the Middle East that has entered a second month.

By 06:49 ET (10:49 GMT), the Dow futures contract had added 187 points, or 0.4%, S&P 500 futures had risen by 26 points, or 0.4%, and Nasdaq 100 futures had jumped by 74 points, or 0.3%.

The main averages on Wall Street sank at the end of last week, even after President Donald Trump’s decision to delay until April 6 a deadline for Iran to reopen the Strait of Hormuz or face U.S. attacks on domestic power facilities.

"[M]arkets remain very much on edge about the Middle East, and the consensus view is still that the conflict is set to escalate," analysts at Vital Knowledge said in a note to clients.

A sharp spike in oil since the outbreak of the conflict in late February has sparked worries over renewed inflationary pressures in countries around the world, which could in turn spur on central bank interest rate hikes. Government bond yields have risen against this backdrop, including U.S. Treasuries, weighing on stocks.

Traders are no longer pricing in any rate easing by the Federal Reserve this year, versus expectations for two drawdowns prior to the war, according to CME’s FedWatch Tool. Key labor market and business activity data is due out this holiday-shortened week, and Fed Chair Jerome Powell is set to speak later in the day.

Brent hovers above $115

With the conflict in the Middle East raging, the Wall Street Journal has reported that President Donald Trump is considering a potentially complex and risky military operation to remove almost 1,000 pounds of uranium from Iran.

Meanwhile, troops from the U.S. 31st Marine Expeditionary Unit are said to have arrived in the Middle East, in a move reportedly aimed at giving Trump more options as he mulls over the next phase of the war. A Washington Post report said the Pentagon was preparing for weeks of ground operations in Iran.

Tehran has vowed to destroy any U.S. forces that attempt to stage a ground incursion into the country.

At least 12 U.S. troops were injured in an Iranian attacks on an air base in Saudi Arabia over the weekend. Iran-aligned Houthi rebels in Yemen joined the fray for the first time as well, firing attacks at Israel and exacerbating already heightened fears around disruptions to key energy supplies.

Should the Houthis target the Bab al-Mandab Strait in particular, the Vital Knowledge analysts flagged that a global shipping crisis already caused by the effective closure of the Strait of Hormuz off the southern coast of Iran would be "dramatically amplif[ied]." The Bab al-Mandab Strait is a key choke point for vessel traffic which connects the Red Sea to the Gulf of Aden and the Indian Ocean.

Brent crude futures expiring in May jumped by 2.6% to $115.53 a barrel by 06:55 ET.

Trump says Iran negotiations going "well"

Trump suggested that direct negotiations with Iran were ongoing and that a deal with Tehran could be close.

Speaking to reporters aboard Air Force One, Trump said negotiations were going “extremely well,” and that a deal with Iran was possible, touting “regime change” in Tehran after U.S. strikes killed several top Iranian officials in the past month.

“I think we’ll make a deal with them, but it’s possible we won’t,” the president said. Responding to a reporter’s question, Trump said “I do see a deal with Iran, could be soon,” although he did not offer a specific timeline.

Iran has largely denied that direct talks with Washington had taken place since the onset of the war, and has called for a cessation in hostilities before any negotiations can take place.

Yet, as has been the case for much of the conflict, Trump’s statements came with caveats. Along with the WSJ report of a potential U.S. uranium extraction plan, the president told the Financial Times that he wants to take Iran’s oil and could seize Kharg Island, a major export hub for Tehran.

"Maybe we take Kharg Island, maybe we don’t. We have a lot of options," Trump told the FT.

Gold prices rose more than 2% in Asian trading on Friday, supported by a slightly softer U.S. dollar and easing geopolitical tensions after Donald Trump signaled progress in talks with Iran.

Spot gold was last up 2.1% at $4,467.32 per ounce by 02:41 ET (06:41 GMT), while U.S. Gold Futures rose 1.1% to $4,457.6/oz.

Gold declined nearly 3% in the previous session, and was set to fall 0.5% for the week.

Trump vows to pause Iran energy attacks

President Trump said on Thursday he would pause attacks on Iran’s energy infrastructure for 10 days at Tehran’s request and added that negotiations were “going very well.”

The temporary halt in hostilities reduced immediate safe-haven demand but also weighed on the dollar, lending support to bullion, which typically moves inversely to the greenback.

The US Dollar Index edged down 0.1% after three days of gains.

Gold markets have been highly volatile in recent weeks, as the ongoing Middle East conflict disrupted traditional safe-haven dynamics.

A sharp spike in oil prices earlier this month, triggered by supply disruptions from the Iran conflict, has fueled concerns over global inflation.

Higher energy costs could keep inflation elevated and reinforce expectations that central banks will maintain interest rates at higher levels for longer.

Silver, platinum prices jump

Oil prices ticked lower on Friday and were set for a weekly loss amid de-escalation talks.

However, lingering uncertainty over the conflict’s trajectory and conflicting signals around efforts to end the war kept investors on edge.

Among other precious metals, silver prices climbed 2.6% to $68.75 per ounce, while platinum jumped 3.5% to $1,901.60/oz.

Benchmark Copper Futures on the London Metal Exchange rose 1% to $12,254.95 a ton, while U.S.Copper Futures gained 1.1% to $5.53 a pound.

The U.S. dollar steadied against most major currencies on Thursday, pausing after strong gains this month, as dealers awaited clarity on what would happen next in the Iran war and hence the direction of oil prices, inflation and central bank policy.

Iran’s foreign minister said the country was reviewing a U.S. proposal to end the war but did not intend to hold talks to end the widening Middle East conflict, leaving markets struggling for direction. 

The dollar has been the outperformer in currency markets since the war began at the end of February, as the U.S. is a net energy exporter unlike Europe, Japan and Britain. On Thursday it was steady against most major peers.

The euro was flat at $1.1557. It has fallen from above $1.80 in late February, but is off its mid-month lows close to $1.40.

Sterling was slightly softer at $1.3349. While it has fallen less against the dollar than the euro, the monthly directional pattern of a sharp decline and some rebound has been similar. The dollar was flat against the Japanese yen at 159.48, but close to last week’s near two-year top.

SLIGHT IMPROVEMENT IN SENTIMENT, ANALYST SAYS

ING currency analyst Francesco Pesole said in a note to clients that market sentiment had slightly improved after "some constructive headlines on the Middle East conflict".

"Still, the FX market isn’t ready to add another leg of de-escalation trade just yet. After all, oil prices still above $100 a barrel argue against aggressive dollar selling."

The implications of the war for currency markets are largely driven by oil and gas prices.

After the closure of the Strait of Hormuz caused energy prices to spike, traders have questioned previous inflation expectations and grown more confident that the U.S. Federal Reserve will keep policy settings on hold throughout the year.

Market pricing sees around a 40% chance the Fed will raise rates by its December meeting.

The situation is different in Europe. Markets are close to fully pricing three European Central Bank rate hikes this year, and expect at least two, maybe three, from the Bank of England.

But remarks from policymakers are being monitored for signs they may prioritise keeping rates lower to support growth rather than hiking them to curb inflation.

The problem of higher energy costs for central banks is that they both hit growth and drive inflation.

European Central Bank President Christine Lagarde on Wednesday said the ECB would have to respond in a forceful or persistent way if inflation looked set to sit well above its 2% target for an extended period, but said even a more modest overshoot could call for a "measured" rate move.

Three BoE rate setters are also due to speak on Thursday.

Against the Chinese yuan, the U.S. dollar was flat at 6.908 yuan in offshore trading after Trump said he will meet Chinese President Xi Jinping on May 14 and 15 following a delay due to the Iran war. 

The dollar was also steady against the Swiss franc at 0.7920 francs.

Oil prices fell in Asian trading on Wednesday, although Brent crude remained above $100 a barrel, as Middle East strikes continued despite talks of de-escalation.

As of 21:18 ET (01:18 GMT), Brent Oil Futures expiring in May fell 3.8% to $100.51 per barrel, while West Texas Intermediate (WTI) crude futures declined 3.1% to $89.50 per barrel.

Brent oil had slipped to as low as $97.15/barrel earlier in the day.

The decline followed reports that the United States had sent Iran a 15-point plan aimed at ending the war in the region, raising hopes for a ceasefire and reduced risks to key oil shipping routes, including the Strait of Hormuz.

U.S. President Donald Trump said Washington was “in negotiations right now” with Iran, adding that Tehran was “talking sense” and appeared eager to strike a peace deal.

However, media reports said Israel struck Iran’s capital, Tehran, on Wednesday, even as the U.S. signalled potential diplomatic progress.

Trump had earlier described talks with Iran as “productive” on Monday, but Iranian officials denied that any negotiations had taken place.

Oil markets had rallied sharply in recent sessions on fears that escalating tensions could disrupt supplies from the Middle East, a key producing region. Concerns had centred on the Strait of Hormuz, a critical chokepoint for global crude flows.

Wednesday’s sharp selloff reflected a rapid unwinding of the geopolitical risk premium, as traders reacted to signs that tensions could ease.

Analysts said that while the prospect of de-escalation pressured prices, conflicting signals from Washington and Tehran were likely to keep markets volatile.

Markets remain tightly anchored to oil as investors navigate the fallout from the Iran conflict, with Goldman Sachs strategist Christian Mueller-Glissmann saying crude is the key driver across asset classes.

Speaking on Bloomberg TV, he said oil is “the lead asset” and that “all markets are correlated to oil,” as investors look for prices to stabilize after a period of sharp moves. He described the current phase of the conflict as one of “high velocity,” with elevated risk and markets still primarily treating the shock as inflation-driven rather than growth-destructive.

Daan Struyven, who leads Goldman research on oil markets, raised his oil price forecasts for the second time in under two weeks, citing prolonged disruptions in the Strait of Hormuz and rising structural supply risks. The investment bank now assumes flows through the key shipping route will remain at just 5% of normal levels for six weeks, followed by a gradual one-month recovery, a scenario expected to materially tighten global supply.

In the near term, he expects prices to keep trending higher amid uncertainty, noting a “growing risk premium” will be needed to curb demand and guard against shortages.

Goldman now sees XBR/USD averaging $110 in March-April, up from $98 previously and significantly above 2025 levels. The bank also lifted its 2026 forecasts, with Brent seen at $85 and WTI/USD at $79, alongside higher long-dated price assumptions driven by deeper inventory drawdowns and a reassessment of effective spare capacity.

Difficult spot for central bankers

“You haven't seen as much damage on the growth side,” Mueller-Glissmann said, though he expects that balance to shift, with inflation expected to run “a bit higher” and growth “a bit lower” through the rest of the year.

Central banks face a difficult backdrop, he added, noting policymakers are reacting more aggressively after being late to respond in 2022. “It’s a very tough spot,” he said, as officials attempt to contain inflation risks stemming from higher energy prices.

On currencies and safe havens, Mueller-Glissmann said the dollar’s role is less clear this time, despite recent strength.

“We are still leaning more towards fading the dollar strength eventually,” he said, favoring the Swiss franc and yen instead.

Why gold is falling?

Gold has come under pressure largely because, according to Mueller-Glissmann, its role as a hedge against the dollar has weakened in the current environment. When the dollar strengthens, investors are typically less compelled to hold gold as a diversifier, reducing demand at the margin. That dynamic has been a key driver of the recent pullback, alongside tighter financial conditions and a more aggressive policy backdrop, the strategist explained.

Positioning has also played a meaningful role, he said. Gold entered the year with elevated exposure, initially driven by central bank buying and later reinforced by investor inflows. As market volatility picked up, part of that positioning has started to unwind, in some cases retail investors selling gold to raise liquidity. The fact that gold had previously performed well as a safe haven made it a natural source of funds during risk-off moves.

Finally, the speed of the recent decline suggests that derivatives have amplified the move, with options likely contributing to sharper, more mechanical selling, according to Mueller-Glissmann.

Despite this, the pullback in gold prices is not necessarily a shift in the longer-term thesis, he said.

"It does tell me, it's probably an opportunity for longer term investors," the strategist concluded.

Most Asian currencies weakened on Monday, while the dollar steadied as markets feared an escalation in the U.S.-Israel war on Iran, especially after President Donald Trump issued an ultimatum to Tehran. 

Regional markets also remained on edge as oil prices rose, fueling concerns over energy-driven inflation and hawkish central banks in the developed world. 

The dollar index and dollar index futures both steadied in Asian trade after losing some ground last week. 

Indian rupee hits record low on oil shock jitters 

The Indian rupee was among the worst performers on Monday, with the USD/INR pair rising 0.3% and crossing 94 rupees for the first time ever.

India is seen as among the more vulnerable countries to disruptions in oil and gas supplies, with rising oil prices expected to weigh heavily on the rupee. 

Local media reports also pointed to a brewing gas shortage in the country. India imports roughly 80% of its oil and gas consumption, with a bulk of its shipments coming from the Middle East. 

Still, deeper declines in the rupee have been deterred by continued intervention by the Reserve Bank of India in foreign exchange markets. 

South Korean won falls, new BOK governor seen as hawkish 

The South Korea won’s USD/KRW pair rose 0.2%, but traded below a 17-year high hit earlier in the session.

The won took some support from bets that new Bank of Korea Governor Shin Hyun-song was a hawkish pick for the role, and that interest rates could rise later this year.

Shin– who is most famous for predicting the 2008 financial crisis– said he will seek a more “balanced” policy approach.

But analysts viewed past statements from Shin as leaning hawkish, given that he has spoken against overlending, excessive liquidity, and inflation. 

ING analysts said that the BOK under Shin could hike interest rates by as soon as July, especially as the Iran crisis presents more inflationary pressures.

Asia FX weakens with Iran escalation in focus

Broader Asian currencies largely weakened, with the Japanese yen’s USD/JPY pair rising 0.1%, while the Chinese yuan’s USD/CNY pair added nearly 0.4%.

The Singapore dollar’s USD/SGD pair rose 0.1%, while the Australian dollar’s AUD/USD pair slid 0.6%. 

Markets remained on edge over an escalation in the Iran war, especially after Trump said Tehran had 48 hours to reopen the Strait of Hormuz or face U.S. strikes on key energy infrastructure.

Tehran responded by threatening to attack key energy and water infrastructure across the Middle East, and that it would also completely shut the Strait. 

Reports showed the conflict heading towards little de-escalation after it entered its fourth consecutive week, with hostilities continuing across the Middle East.

Gold prices held on to modest gains in European trading on Friday, but were still nursing deep weekly losses, as the U.S.-Israel war on Iran raised inflation expectations and dented bets on interest rate cuts. 

The yellow metal had tumbled on Thursday after several major central banks flagged caution over the inflationary effects of the Iran war. This in turn fueled expectations for no interest rate cuts in the near-term – a scenario that bodes poorly for precious metals. 

Spot gold rose 0.1% to $4,657.00 an ounce by 06:45 ET (10:45 GMT), while gold futures advanced 1.1% to $4,658.41/oz.

Bullion took some relief from a drop in the dollar, which was headed for its first weekly loss in three. The greenback was outpaced by other major developed world currencies after several central banks flagged plans for interest rate hikes in the face of rising energy prices. 

Gold heads for deep weekly losses

Spot gold was trading down roughly 8% this week – its worst weekly drop since early-2020. Despite being widely regarded as a safe haven asset, gold has largely underperformed since the onset of the Iran war in late-February. 

Safe haven flows into gold were vastly overshadowed by a spike in the dollar and U.S. Treasury yields, as markets fretted over the inflationary effects of the conflict.

Oil prices shot up to near four-year highs this week, fueled in large part by strikes on Middle Eastern energy infrastructure. The spike in oil saw a swathe of major global central banks flag caution over potential energy-driven inflation.

The Reserve Bank of Australia hiked interest rates, while the Federal Reserve, European Central Bank, Swiss National Bank and Bank of Japan all left rates steady and warned of few changes in the coming months.

“Growing concerns over the global economic fallout from the conflict are weighing on risk appetite. The spike in oil prices has added to inflation concerns, reducing the likelihood of a near-term U.S. rate cut and creating headwinds for both industrial and precious metals,” analysts at ING said in a note.

Oil prices jumped on Thursday, with benchmark Brent rising to its highest in more than a week to more than $115 a barrel, after Iran attacked energy facilities across the Middle East following Israel’s strike on its South Pars gas field, a major escalation in the war. 

Brent futures were up $6.08, or 5.7%, at $113.46 a barrel by 0814 GMT, after climbing almost $8 to the highest since March 9 to a session high of $115.10.

U.S. West Texas Intermediate crude rose 57 cents, or 0.6%, to $96.89 a barrel, after earlier gaining almost $4 to trade at $100.02.

WTI has been trading at its widest discount to Brent in 11 years due to releases from U.S. strategic reserves and higher freight costs, while renewed attacks on Middle Eastern energy facilities boosted support for Brent. 

"Escalation in the Middle East, precise attacks on oil infrastructure, and the death of Iranian leadership all point to a prolonged disruption in oil supplies," ⁠Phillip Nova analyst Priyanka Sachdeva said in a note. 

"Adding fuel to the fire, the Federal Reserve served ’steady rates’ with a hawkish narrative, pointing to the economic concerns that follow a war."

U.S. FED HOLDS STEADY

The U.S. central bank held interest rates steady on Wednesday, projecting higher inflation as policymakers take stock of the impact of the U.S.-Israel war with Iran.

On Wednesday, QatarEnergy said Iranian missile attacks on Ras Laffan, the site of Qatar’s core LNG processing operations, caused "extensive damage" to its energy hub. 

Saudi Arabia said it intercepted and destroyed four ballistic missiles launched on Wednesday toward Riyadh and an attempted drone attack on a gas facility.

Saudi Aramco’s SAMREF refinery in the Red Sea port of Yanbu was also targeted in an aerial attack on Thursday.

Kuwait Petroleum Corporation said an operational unit at its Mina al-Ahmadi refinery was hit by a drone, igniting a limited fire. 

Iran issued evacuation warnings before its attacks for several oil facilities across Saudi Arabia, the UAE and Qatar, as it prepared to retaliate for strikes on its own energy infrastructure in South Pars and Asaluyeh. 

South Pars is the Iranian sector of the world’s largest natural gas deposit, which Iran shares with U.S. ally Qatar on the other side of the Gulf.

Israel carried out the South Pars gas field attack, but the United States and Qatar were not involved, President Donald Trump said late on Wednesday.

He added that Israel would not further attack Iranian facilities in South Pars unless Iran attacked Qatar, and warned that the United States would respond if Iran acted against Doha.

Earlier, Reuters reported that Trump’s administration is considering deploying thousands of U.S. troops to reinforce its operation in the Middle East, in preparation for the next steps of its campaign against Iran.

Gold prices fell below key levels in Asian trade on Wednesday as markets grew more uncertain over interest rates and inflation before the conclusion of a closely watched Federal Reserve meeting later in the day.

While gold had initially risen back above $5,000 an ounce level, it reversed course as continued hostilities in the U.S.-Israel war on Iran left markets largely on edge over the conflict’s inflationary effects. 

Spot gold fell 0.4% to $4,987.09 by 01:18 ET (05:18 GMT), while gold futures fell 0.4% to $4,990.44/oz. 

Other precious metals also retreated, with spot silver down 0.3% at $79.0345/oz, while spot platinum fell 0.6% to $2,116.40/oz. 

Gold sees limited haven demand as Iran war rages on

A worsening conflict in the Middle East offered limited support to gold, which struggled to remain above $5,000/oz this week even as the U.S. and Israel continued to attack Iran, drawing a wave of retaliatory attacks from the Islamic republic. 

The war showed few signs of abating after an Israeli air strike killed Iran security chief Ali Larijani earlier this week. Oil prices remained perched above $100 a barrel, amid continued concerns over supply disruptions. 

Markets largely feared the inflationary impact of the conflict, especially as oil prices shot up to near four-year highs after supply through a key shipping lane– the Strait of Hormuz– was disrupted. 

Energy-fueled inflation could elicit a more hawkish stance from major central banks, with the Reserve Bank of Australia raising interest rates on Tuesday and warning of inflationary pressures from the conflict. 

Fed, central banks awaited for more rate cues

The Fed, along with a host of other major central banks, are now set to meet in the coming days. The Fed will decide on rates later on Wednesday, followed by the Bank of Japan, the European Central Bank, the Swiss National Bank, and the Bank of England later this week. 

The Fed is widely expected to leave rates unchanged, with focus squarely on whether the central bank expects an inflationary bump from the Iran conflict, and whether it could affect the outlook for interest rates. 

Markets were seen largely pricing out expectations for any interest rate cuts by the Fed until at least September, CME Fedwatch showed.

The prospect of higher for longer rates bodes poorly for gold, given that it increases the opportunity cost of investing in non-yielding assets. 

While gold still retained some of its annual gains, it was nursing a sharp fall from a near $5,600/oz record high hit in late-January. 

Oil prices rose sharply in Asian trade on Tuesday, with Brent remaining above $100 a barrel as concerns over supply disruptions stemming from the U.S.-Israel war on Iran remained largely in play. 

Crude prices recovered after a 5% drop in the prior session, as reports showed some vessels having successfully passed through the Strait of Hormuz. But the shipping lane still remained largely blocked, and U.S. calls for allied help in policing the strait were also mostly rebuffed. 

Brent oil futures rose 2.8% to $103.01/barrel by 00:58 ET (04:58 GMT), while West Texas Intermediate crude futures rose 2.6% to $95.54/barrel. 

Iran conflict rages on, Hormuz crossings limited

Hostilities between the U.S., Israel, and Iran showed few signs of easing on Tuesday as the conflict entered its third consecutive week.

Iran threatened to hit U.S.-affiliated industries in the Middle East, after the U.S. and Israel last week attacked Kharg Island, a key export terminal for the Islamic republic.

Iran and Israel traded air strikes in the early hours of Tuesday, with drones and rockets also being fired at a U.S. embassy in Baghdad. 

U.S. President Donald Trump over the weekend called on at least seven countries, including China, to help reopen trade through the Strait of Hormuz. But his calls were largely rebuffed, with several U.S. allies indicating they had no immediate plans to send ships to the Middle East. 

The closure of the strait has been a major focus point in the war, given that it accounts for about 20% of the world’s oil supply. Iran had effectively blocked the strait earlier this month. 

But reports on Monday showed some India and Pakistan-flagged gas tankers successfully passed through the strait. Iran had earlier signaled that it will allow ships from some countries to pass through the strait, and will attack any vessels tied to the U.S. and its allies. 

Oil prices have risen sharply since the onset of the Iran war, aided by the prospect of prolonged disruptions in markets. Several major Asian economies are highly dependent on oil imports through Hormuz. 

The inflationary effects of the Iran war have been a major pain point for markets, amid concerns that energy-driven inflation will elicit more hawkish measures from global central banks. 

A swathe of major central banks, including the Federal Reserve, European Central Bank, and the Bank of Japan are set to meet this week.