After mutual bombardment between Washington and Tehran, oil jumps 3% and gold falls

Global oil prices jumped more than 3% in spot trading on Thursday, recouping their previous losses sharply, after the Iranian Revolutionary Guard Corps officially announced the targeting of a US air base in response to pre-emptive strikes carried out by the US military at dawn near Bandar Abbas airport, raising stifling fears among investors about the collapse of the April truce and the return of the complete closure of the vital waterway in the Strait of Hormuz.

Record Numbers in Crude Markets

By 03:44 GMT, benchmark Brent crude futures were up $3.51, or 3.72%, at $97.8 a barrel, while  the more active August  contract climbed $3.35 (3.63%) to $95.6 a barrel.

U.S. West Texas Intermediate crude futures rose $3.31 or 3.73% to $91.99 a barrel, after both crude futures fell 5% in the previous session on hopes of a fabricated political settlement.

Supply shortages exacerbate fears

In a research note to clients, ANZ Bank commodity analyst Daniel Haynes confirmed that global oil supplies are still suffering from obvious limited and scarce markets, pointing out that the main points of contention between Washington and Tehran have yet to be resolved on the ground.

The shortage coincided with data from the American Petroleum Institute (API) showing a sharp drop in U.S. crude oil inventories by 2.8 million barrels last week, falling for a sixth straight week, awaiting official data from the U.S. Energy Information Administration (EIA) later today.

Gold bleeds for third day

Gold continued its decline for a third straight day in global stock exchanges, as new US airstrikes in Iran weakened hopes for peace and inflation risks remain high globally.

The precious metal fell 1% to $4,404.89 an ounce by 10:20 a.m. Singapore time, deepening its 2.6% losses in the previous two sessions and losing more than 16% of its total value since the outbreak of the Iran conflict in late February, erasing most of its annual gains.

Interest whips chase safe haven

Lisa Cook, a member of the US Federal Reserve's Board of Governors, explained in official statements that inflation rates are currently heading in the "wrong direction" due to high energy prices resulting from the closure of the Strait of Hormuz, stressing her full readiness to raise interest rates again if this path continues.

Since gold does not yield a return, this hawkish wave from central banks led to capital flight from it, and the silver fell by 2% to $73.19, in parallel with the decline of platinum and palladium, while the Bloomberg Spot Dollar Index rose by 0.1%.

Huge IPOs Withdraw Liquidity

Global X ETFs Australia investment strategist Justin Lane said traders are actually starting to lose faith in the safe-haven narrative of gold at the moment;

He pointed out that there are better and more attractive investment priorities for investors as they prepare for upcoming IPOs involving CXMT in Asia and SpaceX in the United States.

 Gold will  mostly look for a new technical support point in the $4,000-$4,250 range, as long as oil continues to stabilize and trade at higher levels, Lin said.