The U.S.-Iran conflict is now one month old, and the missile war continues to take place as a strong liquidity crunch takes place in global markets, coupled with volatile swings in the price of gold and oil.
The update comes after crude oil prices dipped below the $100 mark, due to high levels of market volatility.
The crunch in oil supply has affected GCC economies, as oil facilities now produce less crude. Qatar’s central bank has rolled out a series of liquidity measures to help mitigate the impact of rising regional tensions, offering banks the option to buy back Qatari riyals in exchange for their securities under an unlimited repurchase facility, to ensure ample currency remains in the GCC economy.
On the conflict side, the Iranian Parliament speaker, Mohammed Bagher Ghalibaf, has said the U.S. administration is actively considering deploying U.S. troops into Iranian territory and will retaliate if this happens.
U.S. President Donald Trump claims that negotiations are in place, with the recent passage of vessels through the Strait of Hormuz given as an indicator of goodwill on Iran’s part.
U.S. and Asian equities slide in value as conflict continues
While the S&P500 is yet to start trading, it was down by 1.67% in trading on Friday and down by 3.13% over the past 5 days. All large-cap asian equities recorded a drop on Monday by the following amounts:
- Hang Seng Index: 24.750.79 (-0.81%)
- Nifty 50: 22,460.61 (-1.58%)
- Nikkei: 51,885.85 (-2.79%)
- ASX 200: 8,461 (-0.65%)
Stormrake analyst recommends hodling BTC and ETH
Cryptocurrency markets have also registered a downturn over the past week, as investors remain wary of continued participation in digital assets.
The price of Bitcoin continued to trade at a low of $67,708 on Monday, below the $70,000 mark achieved in March, while Ethereum traded at $2,063. Despite the current situation, both blue-chip cryptocurrencies were bullish across a 24-hour timeline, up by 1.58% and 3.16% respectively.
Stormrake senior research analyst Alexandar Artis pointed out on Substack that investors who bought into Bitcoin and Ethereum during the 2021 highs will find their crypto portfolio relatively flat and “underwhelming”.
However, Artis still recommends holding onto these blue-chip cryptocurrencies, saying,
“The real edge in crypto has always come from surviving and accumulating through the compression phases. 2018 to 2020 rewarded conviction. 2022 to 2024 has done the same. These are the periods where narratives fade, liquidity dries up, and attention disappears. Yet structurally, this is where long-term positioning is built.”
“The objective is not to trade in and out of that position. It is to grow it consistently. Over time, your exposure shifts from speculative positioning to meaningful monetary ownership. That shift is what separates participants from long-term holders of value.” he also said
Oil markets throw out mixed signals
Oil markets are throwing out mixed signals, with U.S. crude oil indexes rising while Murban and the OPEC basket suffer a downturn:
- WTI crude oil: $101.63 (+1.63%)
- Brent crude oil: $115.6 (+2.68%)
- Murban crude: $116.3 (-0.73%)
- Natural gas: $2.922 (-3.40%)
- Gasoline: $3.322 (+2.23%)
- Opec basket: $117 (-19.47%)
- Indian basket: $157 (+4.74%)
- Urals oil: $105.91 (+9.97%)
Particularly, the OPEC basket registered a huge downturn of close to 20%, while the Indian basket and Russian grade Urals oil rallied more intensely than U.S. oil indexes.
To help mitigate the dip in oil supply, the IEA (International Energy Agency) announced earlier this month that it would be releasing 400 million barrels of oil.
Gold and silver prices remain depressed
The prices of precious metals such as gold and silver remain depressed, as their volatile behaviour continues, after a 4-week sell-off by institutional players to ease liquidity issues, while governments also keep cash on hand to buy oil amid the current supply crunch.
That being said, both metals experienced a rally. At the time of writing, gold was trading at $4,524, up by 0.76%, while silver was priced at $$70.75, up by 1.42%.