Gold Trading Alert: Gold Prices Experience a Dramatic V-Shaped Reversal Worth Hundreds of Yuan, US and Iran Blockade the Strait of Hormuz, Is Gold’s Safe-Haven Status Making a Comeback?

　　Resurgence of Geopolitical Conflict: US Blockades Iranian Ports, Iran’s Retaliation Sparks Energy Supply Crisis

　　The root of all this was the complete collapse of the weekend's US-Iran peace negotiations. On Monday, President Trump announced that the US military had officially started blocking ships departing Iranian ports. The Central Command issued a navigation warning, emphasizing that the blockade would apply “without exception” to all ships entering or leaving Iranian ports in the Persian Gulf and Gulf of Oman, and clarifying that neutral ships passing through the Strait of Hormuz would not be interfered with. Trump took a hardline stance both at the White House and on social platforms, claiming that the Iranian navy had been “completely annihilated” in earlier skirmishes, leaving only a few fast attack boats, and warned any Iranian vessels approaching the blockade would be “quickly and forcefully” destroyed. He also emphasized that Iran would never possess nuclear weapons and that the US would not tolerate any form of extortion or coercion.

　　Iran quickly responded with a tough stance. Defense Ministry spokesperson Reza Talaei-Nik warned that foreign military attempts to control the Strait of Hormuz would intensify the global energy security crisis and threatened retaliatory strikes on neighboring Gulf ports. The Iranian Revolutionary Guard further labeled the US blockade as “piracy,” and declared that if Iranian ports were threatened, no port in the entire Persian Gulf or Gulf of Oman would be safe. Meanwhile, Israel continued its attacks on Hezbollah-controlled areas in southern Lebanon, further destabilizing the region. Although NATO allies such as the UK and France explicitly refused to participate in the blockade—stating they would only intervene after the conflict ends—the strategic importance of the Strait of Hormuz, a conduit for 20% of the world’s oil and LNG shipments, has pushed markets into extreme tension.

　　Comprehensive Inflation Fears: Oil Price Spike Intensifies Global Economic Pressures, Central Banks’ Room for Rate Cuts Sharply Narrows

　　The sharp rise in oil prices quickly transmitted to inflation expectations, becoming the market’s main focus. Phillip Streible, chief market strategist at Blue Line Futures, said directly: “This is a very headline-driven market. All eyes are on crude oil prices, because they will dictate the direction of inflation, which will in turn decide Federal Reserve policy.” Since the outbreak of US-Israel military action against Iran on February 28, crude prices have climbed about 40%, with rising energy costs directly impacting global consumers’ wallets. In the US, gasoline and diesel prices have reached their highest levels since the summer of 2022, prompting drivers to cut unnecessary travel. OPEC has cut its second-quarter global oil demand forecast by 500,000 barrels/day, and International Energy Agency chief Birol stated that member states may need to release more strategic oil reserves to cope with the crisis.

　　This inflationary pressure isn’t limited to the energy sector, but could also trigger a stagflation risk—that is, inflation remaining high while economic growth slows. An increasing number of countries have announced emergency support measures to ease public burdens, with US one-year inflation swaps rising to 3.168%. The market now expects the US CPI to average about 3.2% year-on-year over the next 12 months, broadly in line with March’s actual 3.4%. High oil prices represent the main obstacle to Fed policy; although gold is traditionally seen as an inflation hedge, a high-interest-rate environment erodes its appeal as a zero-yielding asset.

　　Double Whammy of Dollar and Interest Rate Expectations: The Immediate Drivers of Short-term Gold Price Volatility

　　On the interest rate front, CME’s FedWatch tool shows markets currently assign only about a 29% probability of a rate cut by the Federal Reserve before year-end, a sharp drop from around 40% a month ago. Since the war broke out, spot gold has slumped more than 10%, but interest rate futures have mostly priced out the chance of further hikes this year, giving gold some breathing room. US Treasuries saw small safe-haven inflows, with the 10-year yield down 2bps to 4.297%, and the 2-year yield down 2.1bps to 3.781%, reflecting investors’ continued view of Treasuries as a key haven despite signs of "headline fatigue."

　　Safe-Haven Resilience of Gold Stands Out: Swift Rebound from Lows Turns Market Sentiment Upbeat

　　Though gold fell deeply at one point on Monday, the sharp rebound on Tuesday signaled its safe-haven nature remains. Investors, after digesting news of the blockade, quickly turned to gold for protection—especially with oil prices high and inflation expectations heating up. The dollar’s sustained decline further-supported gold, while Trump’s unpredictable messaging—tough on the blockade, but then indicating Iran had reached out in hopes of a deal—keeps markets cautious but not panicked. Marc Chandler, chief strategist at New York’s Bannockburn Capital Markets, noted: “Given we may be on the verge of a major escalation, the market is showing a lot of restraint.”

　　Over the longer term, gold’s 10% drop since the start of the war is significant, but still demonstrates resilience compared to its historical performance in past geopolitical crises. Analysts believe that if the blockade brings cash and futures prices in line, or the conflict escalates further, gold’s upside could open up even more.

　　Looking Ahead: Oil Remains in the Driver’s Seat, Gold Bulls May See Strategic Opportunities

　　Overall, this gold price action is essentially the result of a three-way tug of war between geopolitics, energy crisis, and monetary policy. Oil prices will be the central variable in coming weeks—if the Strait of Hormuz remains closed, inflation pressures will keep boosting gold’s appeal; by contrast, if the US and Iran find a way to a new deal via a third party such as Pakistan, falling oil prices may temporarily cap gold. However, given NATO’s refusal to get involved, only a week left on the fragile ceasefire, and Trump’s resolute “no deal allowing Iran nuclear weapons” stance, resolution seems unlikely in the short term.

　　For investors, gold’s zero-yield nature may be less attractive in a high-rate environment, but its status as the ultimate safe haven becomes even more pronounced as stagflation risks rise. The early Monday flash crash and subsequent rebound have already sounded an alarm: in an era dominated by geopolitical uncertainty, gold is no longer just a speculative vehicle, but an indispensable ballast in a diversified portfolio. The future trend will depend heavily on oil moves and the Federal Reserve’s guidance, but gold bulls have quietly regrouped—a new safe-haven rally may be brewing. Investors should closely monitor oil and Fed signals, seeking strategic opportunities amid volatility.

Editor: Zhu Hennan