The Hormuz Strait is under double blockade! Brent crude oil approaches $108, and gold has become a "risk asset" being sold off.

Notice that due to the efforts to restart the Iran war and peace negotiations being stalled, coupled with the crucial Strait of Hormuz still effectively closed, the turmoil in the Middle East has further intensified and continues to disrupt global markets, causing international oil prices to rise and gold prices to fall. Brent crude prices rose by 2.5% to $107.97 per barrel, while WTI crude traded close to $96. Gold prices fell by 0.6% to around $4680 per ounce, continuing the 2.5% decline from last week. President Trump canceled the planned trip of his senior envoy to Pakistan (responsible for mediating negotiations) over the weekend; meanwhile, Iran stated that they would not engage in negotiations as long as they feel threatened. Since early April, the ceasefire agreement has been largely maintained, but the blockade of the Strait of Hormuz by the United States and Iran has effectively made this critical energy chokepoint impassable. This supply shock has disrupted the supply of crude oil, fuel, natural gas, and even fertilizers, raising concerns of an inflation crisis. Mona Yacoubian, director of the Middle East Program at the Center for Strategic and International Studies (CSIS), said, "The strait remains tightly closed, with traffic at a standstill," "It appears that neither side wants a return to full-scale conflict. We are in a stalemate 'hell.'" Trump instructed his envoys Jared Kushner and Steven Witkoff to cancel the trip to Pakistan, stating that Iran has offered a lot but not enough. Iranian President Masoud Pezeshkian stated that his country will not accept negotiations imposed under threat or blockade. The Iran war is now entering its ninth week, pushing up energy prices, causing shortages of key products like liquefied petroleum gas in countries like India, and prompting airlines to cut flights. The International Energy Agency (IEA) stated that this conflict is causing the "largest supply shock in history." Robert Yawger, head of energy futures at Mizuho Securities, stated, "Oil prices are heading into the consolidation zone above $100," "As time goes by, the likelihood of reaching an agreement in the short term is diminishing." Traders claimed that the longer the Strait of Hormuz remains closed, the more the consumption side needs to readjust to cope with at least a 10% decline in supply. The loss of 1 billion barrels of oil has almost become a certainty - more than twice the emergency stocks released by governments after the outbreak of conflict, and demand destruction may further spread. As part of the blockade operation, the US military intercepted a sanctioned vessel in the Arabian Sea on Saturday. US naval helicopters intercepted the vessel, which then complied with military instructions and returned to Iran under escort. Central Command reported that 37 ships have been diverted since the blockade began. Most of Iran's crude oil exports go to China, where private refineries (so-called "teapot" refineries) are utilizing lower-priced crude oil. Last Friday, the US sanctioned Hengli Petrochemical (Dalian) Co., Ltd. for its connections with Tehran. Hengli denied any trade with Iran. Gold price dropped Niki Hills, director of research and metal strategy at MKS PAMP SA, stated in a report that gold is in a "technically no man's land." "Market confidence is weak, large funds are still watching, physical demand is mixed, 'lost' may be the most appropriate word to describe the current market." As US prosecutor Jenny Piero announced last Friday that she would abandon the investigation into the Fed's cost overrun, traders are evaluating the Fed's borrowing cost path. This clears the way for Trump's nominee Kevin Wash to become the next Fed chairman. Investors do not expect Wash to adopt the aggressive rate cut measures urged by the president, but rather to proceed gradually and cautiously. In the Middle East, the fragile ceasefire agreement has largely held over the weekend. Hills pointed out: "'Ceasefire-conflict' headlines are playing out in succession, causing a reflex in the market. As gold now behaves like a risky asset - negatively correlated with oil prices, loosely positively correlated with the stock market, but not strongly representative of either - there is little willingness to chase the market when the price is below $5000." At the time of writing, spot gold fell by 0.5% to $4685.14 per ounce. Silver dropped by 0.8% to $75.10 per ounce. Platinum and palladium also experienced declines. The Bloomberg Dollar Spot Index, which measures the performance of the US dollar, rose by 0.1% after a 0.3% increase last week.