Morning Brief: Oil falls, gold rebounds as markets price in ceasefire scenario
market pusula
Signs of renewed diplomacy between the United States and Iran are easing market tensions, sending oil prices sharply lower while lifting gold from recent lows. Investors are increasingly pricing in a potential ceasefire, although ongoing military risks continue to cast uncertainty over the outlook.
Diplomacy revives risk appetite
After nearly a month of conflict, diplomatic momentum appears to be building between Washington and Tehran.
Reports indicate that the U.S. has submitted a 15-point framework to Iran aimed at ending hostilities. The proposal reportedly includes:
- A full halt to Iran’s nuclear activities under international oversight
- Ending support for regional proxy groups
- Reopening the Strait of Hormuz to global shipping
- Restoring normal energy flows
In return, the U.S. is said to be considering:
- Gradual sanctions relief
- Limited permission for Iranian energy exports
- Security guarantees during a ceasefire period
A temporary one-month truce is reportedly being discussed as a first step—suggesting both sides are prioritizing de-escalation over a comprehensive settlement.
Hormuz expectations drive oil lower
The most immediate market impact has been in energy.
The potential reopening of the Strait of Hormuz—through which roughly 20% of global oil flows—has sharply reduced supply fears.
- Brent crude, which had closed near $105, dropped below the psychological $100 level
- The move reflects easing concerns over a prolonged supply shock
If confirmed, such a development could significantly reduce global inflation pressures tied to energy prices.
Gold and silver rebound from liquidation lows
Precious metals, which had been hit earlier by forced liquidation amid market stress, staged a strong rebound:
- Gold climbed from around $4,100 to $4,570
- Silver surged from $61 to $73
The recovery reflects:
- A weaker dollar
- Lower oil-driven inflation expectations
- Renewed safe-haven demand
Technically, gold’s rebound from key long-term averages suggests the worst of the recent sell-off may be over, while silver’s breakout above key levels strengthens the bullish case.
Inflation and rate expectations shift
Falling oil prices are feeding into a broader narrative:
- Inflation risks may be easing
- Interest rates may not need to rise further
This shift is supportive for gold, which tends to perform better when real yields stabilize or decline.
However, structurally:
- Elevated interest rates
- A still-strong dollar
continue to cap upside potential in the near term.
Risks remain: $150 oil scenario still possible
Despite improving sentiment, downside risks remain significant:
- Military operations continue on the ground
- U.S. troop deployments to the region are ongoing
- Trust between parties remains fragile
If negotiations collapse and disruptions at Hormuz persist, market participants warn that:
- Oil could spike toward $150 per barrel
- Global inflation pressures would intensify again
U.S. markets face stagflation concerns
U.S. equities have come under pressure in recent sessions, reflecting a difficult macro mix:
- Rising oil prices
- Higher bond yields
This combination has weighed particularly on rate-sensitive technology stocks.
The risk of stagflation—high inflation combined with slowing growth—has re-emerged as a key concern, with expectations of Federal Reserve rate cuts fading.
Relief rally takes hold globally
Markets are showing signs of relief as the ceasefire narrative gains traction:
- U.S. 10-year yields eased from above 4.40% to around 4.34%
- Oil slipped below $100
- U.S. and European futures moved higher
- Asian equities rallied broadly
Japan’s benchmark index rose around 3%, while South Korea’s Kospi gained roughly 2%.
Türkiye angle: Reserve impact in focus
For Türkiye, gold price movements have had a direct impact on central bank reserves.
- Falling gold prices reduced the dollar value of reserves
- Net foreign currency position reportedly declined by $14.6 billion in a single day
- Since the start of the conflict, total erosion has reached around $50 billion
Meanwhile:
- USD/TRY trades near 44.30
- CDS spreads have eased below 300 basis points
- Two-year bond yields remain elevated around 41–42%
Banking stocks continue to face selling pressure.
Emre Değirmencioğlu, KİB
