Oil Slides as Iran Hopes Lift Risk Appetite

Global markets saw sharp but mixed moves on Monday as investors weighed the possibility of easing tensions between the US and Iran, while trading activity remained relatively thin due to holidays in both Wall Street and UK markets.
Energy markets dominated the session after oil prices plunged on hopes of a breakthrough agreement between Washington and Tehran that could stabilize the Middle East and reduce supply risks tied to the Strait of Hormuz.
Brent crude tumbled 5.55% to settle at $97.77 per barrel, while US WTI crude dropped 5.85% to $90.95 per barrel. The selloff accelerated after reports suggested Iranian oil exports could gradually return to global markets, while tanker traffic through the Strait of Hormuz resumed more normally, easing fears of major supply disruptions.
In contrast, gold rallied strongly as investors continued seeking protection against geopolitical uncertainty and a weakening US dollar. Spot gold climbed 1.2% to $4,564.09 per ounce, while silver surged 3% to $77.80.
Precious metals also found support from growing expectations that the Federal Reserve could eventually pause or cut interest rates if signs of economic weakness in the United States intensify in coming months.
Currency markets reflected improving investor sentiment, with the US dollar losing some of its recent safe-haven appeal. The US Dollar Index (DXY) slipped 0.25% to 98.97, while the euro strengthened to 1.1643 against the dollar and the British pound rose to 1.3494.
Meanwhile, cryptocurrencies remained relatively resilient despite broader volatility. Bitcoin continued trading near the $77,000 level, fluctuating between $76,700 and $77,500, as investors maintained appetite for alternative and higher-risk assets amid expectations of easier global monetary policy.
Market Outlook
Markets are likely to remain highly sensitive to developments surrounding US-Iran negotiations, particularly any confirmation regarding the reopening of the Strait of Hormuz and the durability of the ceasefire.
Oil prices could remain under pressure if de-escalation momentum continues and expectations grow for additional Iranian supply entering global markets. However, any sudden geopolitical setback could quickly reverse sentiment.
Gold may continue trading in a volatile but supported range as investors balance falling safe-haven demand against growing expectations of future Federal Reserve rate cuts.
The US dollar may remain soft if markets continue pricing in a more dovish Fed outlook, while Bitcoin and other cryptocurrencies are expected to remain closely tied to global liquidity conditions and broader investor risk appetite.