Donald Trump told reporters again that a deal to end the war he and Israel started with Iran could be reached in “two or three days,” even as a Middle East ceasefire collapsed over the weekend and traders retreated from oil and gold.
He said the Strait of Hormuz would reopen “immediately” after an agreement was reached, which is important because this waterway is one of the biggest pressure points in global energy trade.
Trump said the two sides are nearing the end of talks on “a very good agreement that in no way will allow nuclear weapons.” Sky News Arabia also reported on Monday that a draft agreement had been sent to Washington for review and was “in principle acceptable” to the White House.
Trump pushes for near-term Iran deal as new Israeli strikes test ceasefire
Just before Trump made the above comments, Iran and Israel exchanged blows over the weekend for the first time since the truce began in mid-April.
Iran launched missiles towards northern Israel after accusing Jerusalem of violating the truce through attacks in Lebanon. These Israeli strikes included an attack on the southern suburb of Beirut on Sunday. Israel then said it carried out a “large-scale strike on strategic defense systems” in response.
As you know, Trump has made many bold calls about his war, and he had previously said that the fighting would last four to six weeks, but the conflict crossed the 100 line on Sunday.
Trump too Directed A separate US military incident near the Strait of Hormuz. He said that the pilots of the US military Apache helicopter that crashed on Monday were “fine.” He added that no one was injured, and said that the administration would issue a report on Tuesday. The cause of the accident is still unknown.
Oil prices fell on Tuesday morning after statements regarding the ceasefire. Brent crude fell 1.3% to $93.02 per barrel. US West Texas Intermediate crude fell 1.8% to $89.67 a barrel. Brent crude was also approaching the $94 level during trading on Tuesday.
Energy and gold analysts cut through the noise with ugly price calls
Meanwhile, Claudio Galimberti, chief economist at private research firm Rystad Energy, said oil could reach $150 a barrel over the next two months if fighting continues and inventories continue to decline.
“At this point, unless we resolve (the conflict in the Middle East), unless we start to see an increase in the flow, we will see an increasing decline in stocks, which means an increasing rise in prices,” Claudio said. “The problem, which is here, now, is that we are not there at all.”
Claudio also pointed out the chaotic long-term setup. Even if the current oil crisis is resolved, he said that the market may later face a large supply glut due to the dismantling of OPEC and the UAE. “This is a year of absolute deficit, but quickly, 2027 may turn out to be a year of massive surplus,” Claudio said.
Gold had its own ugly setting. Prices have fallen sharply since reaching an all-time high of $5,594.82 per ounce on January 29. Analysts at Citigroup Inc., which is owned by Citigroup, said gold could fall to $3,500 an ounce if the Strait of Hormuz remains closed until the end of the summer.
That would be about 19.7% lower than the $4,357.90 price seen at 7 a.m. EST on Tuesday. Gold, often treated as a classic safe-haven trade, looks “incredibly high risk” in the short term, Citi said.
Citi said a prolonged closure of the Strait of Hormuz could slow global gold buying and return prices to levels last seen nine months ago. Since the war between the US and Iran began on February 28, gold’s safe-haven image has taken a hit as traders question the reasons behind its huge rise.
The stronger-than-expected US jobs report last week added more pressure as it raised expectations for a hike in interest rates at the end of the year. High interest rates usually hurt gold because the metal pays no yield. Citibank cut its three-month gold target to $4,000 an ounce from $4,300, while US gold futures for August delivery were trading at $4,352.90 on Tuesday morning.
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