MUFG: Commodities - FJElite

Oil holds gains as uncertainty over US-lran talks supports prices. Oil prices steadied after posting their strongest daily gain in about a month, as uncertainty surrounding US-lran negotiations raised concerns that disruptions to energy flows from the Persian Gulf could persist. Brent crude traded below USD95/b and WTI near USD92/b after markets reacted to conflicting signals over the status of talks, including reports that Iran had suspended negotiations before President Trump later stated discussions were still ongoing. Trump said a MoU to reopen the Strait of Hormuz could be reached within a week, although key issues remain unresolved. Markets are also monitoring reports that Iran and its regional allies are considering further restrictions on both the Strait of Hormuz and the Bab el-Mandeb Strait. With commercial traffic through Hormuz still constrained and geopolitical tensions extending to Lebanon, investors remain focused on the risk of prolonged supply disruptions in a region that normally handles around one-fifth of global oil and LNG trade.

Gold remains under pressure as Iran talks uncertainty sustains inflation concerns. Gold traded near USD4,490/oz, as conflicting signals from the US and Iran clouded prospects for a diplomatic resolution to the conflict. While President Trump said negotiations were continuing at a rapid pace, reports of renewed tensions around the Strait of Hormuz and mixed messages on regional developments kept markets uncertain. The ongoing risk of prolonged energy supply disruptions has strengthened the US dollar and pushed bond yields higher, all of which have weighed on gold. Gold remains about 15% below its pre-war level, as investors balance geopolitical risks against expectations that persistent inflation and resilient US economic data could delay interest-rate cuts.