New Blockade and More Bombing

After talks failed, both sides have increased rhetoric and escalated their threats. According to the Wall Street Journal, Trump is considering limited strikes alongside a blockade of Iranian ports. This appears to be an attempt to target Iran in a controlled way while still allowing transit through the Strait of Hormuz.

Following the news, oil prices spiked while gold eased. The broader pattern in recent weeks is becoming clearer. Ceasefires and peace announcements have often emerged just before the weekly trading close, placing downward pressure on oil and supporting risk assets. Once markets close, tensions appear to rise again, only to ease ahead of the next open.

Iran, however, is a far more significant counterpart than Iraq, and this pattern of stop-start escalation is proving less effective.

The proposed blockade stems from a US Central Command statement. Under the plan, any vessel visiting Iranian ports would be intercepted, regardless of origin. Ships not travelling to or from Iran would still be allowed to pass. This points to a form of economic containment. As in historical warfare, a siege begins by cutting off supply lines, though in this case the challenge is far more complex—balancing disruption with the need to maintain global trade flows and contain price pressures.

Although gold initially slipped on the news, the decline has not extended. The primary headwind for gold and silver remains expectations of rate cuts being pushed further out. However, with ongoing strain in private credit markets and concerns around global liquidity, particularly in an environment where easing may be constrained, gold continues to hold its ground as a safe haven asset.