Donald Trump, the President of the United States, rejected Iran's seven-day proposal to reopen the Strait of Hormuz. This action caused oil prices to rise at the start of today's trading. However, following these developments, the gold market was also significantly affected, and its price fell below $4,200.
Developments in the Strait of Hormuz
Meanwhile, a cruise missile was fired at a vessel in the Strait of Hormuz, raising concerns about maritime security in the region. Additionally, reports of Houthi attacks on Riyadh have emerged. These attacks led to disruptions in aircraft landings at King Khalid International Airport. Trump also announced that he is seriously considering the issue of banning U.S. diesel exports.
Read more: Increase in Saudi oil exports from the Strait of Hormuz to 7.4 million barrels per day
Impacts on Global Markets
Analysts at Goldman Sachs have estimated that if the diesel export ban is implemented, its price in the U.S. could decrease by about 4%, while its price in Europe would increase by 2%. However, this scenario is not currently Goldman’s base case and is considered a possibility.
In the metals market, gold experienced a sharp decline due to rising bond yields and strengthened expectations for an increase in Federal Reserve interest rates, breaking hourly support around $4,250. Silver also faced a 3% decrease. In Asia, Japan's producer price index for services rose by 3.7% in August. The minutes from the Bank of Japan's July meeting indicate that one member supported an increase in interest rates.
In China, industrial profits rose by 4.2% in August, marking the lowest growth this year, and the Shanghai index experienced a 1.8% decline. In trade, China and the United States have agreed to form a trade council and extend the trade truce until January 2027.
The currency market is currently fluctuating within a limited range for major currency pairs, while the New Zealand dollar has performed better than other major currencies.
Read more: Oil exports from the Strait of Hormuz reached 7.4 million barrels per day in September · Iran has an inaccurate assessment of its bargaining power in the Strait of Hormuz
