Gold prices edged lower on Tuesday, as they continue to move within a minor bullish channel on the four-hour timeframe. The yellow metal is currently looking to maintain its trading above the bullish channel’s lower line; if it manages to do so, it could rise toward resistance levels at $4,439 then $4,474. On the downside, if the price falls below the channel’s lower line, it may decline toward support levels at $4,328 then $4,295.
Geopolitical tensions in the Middle East intensified as the United States ruled out extending its ceasefire agreement with Iran, while President Donald Trump escalated pressure on Oman over its talks with Tehran by threatening military action. At the same time, oil prices climbed amid growing concerns over potential supply disruptions, particularly around the strategically vital Strait of Hormuz. The developments have heightened uncertainty across global markets, with investors closely monitoring the outlook for energy supplies, regional stability, and the potential economic impact of prolonged geopolitical tensions.
Market Watch
United States Rules Out Extending Ceasefire Agreement with Iran
The United States has ruled out extending the temporary ceasefire agreement with Iran, as diplomatic efforts to reach a permanent settlement have stalled, raising concerns over a potential resumption of military hostilities and escalating tensions across the Gulf region.
The ceasefire agreement, reached under a memorandum of understanding brokered by Pakistan, established a temporary 60-day period that expired on Monday, August 17, without sufficient progress toward a final settlement between Washington and Tehran. U.S. President Donald Trump said the United States does not intend to extend the agreement, as negotiations have reached an impasse.
The U.S. position comes as Iran has signaled that it could adopt a more aggressive military stance if diplomatic efforts fail and previously agreed commitments are not implemented. Tehran has also warned of the potential consequences of continued tensions surrounding the Strait of Hormuz, a major transit route for global oil shipments.
Earlier reports had indicated that the United States and Iran had reached a preliminary understanding on extending the ceasefire. However, Iran subsequently denied that formal negotiations over an extension were taking place. On August 12, a senior Iranian official told Reuters that Tehran was seeking the restoration of the interim agreement and a clear timetable for Washington to fulfill its commitments.
The expiration of the ceasefire without a new agreement has increased the risk of further escalation in the region, particularly amid continued uncertainty surrounding maritime traffic through the Strait of Hormuz. Oil prices have already responded to the heightened geopolitical risks, with Brent crude rising toward $91 per barrel on Tuesday as concerns over potential supply disruptions intensified.
The security situation has also raised concerns over the safety of commercial shipping. A vessel transiting outside the Strait of Hormuz was reportedly attacked by a projectile, causing damage to its engine room and injuring a crew member, according to maritime reports cited by the Associated Press.
Markets are now closely monitoring developments between Washington and Tehran. The failure to extend the ceasefire and continued uncertainty surrounding the Strait of Hormuz could provide further support to oil prices and increase volatility across financial markets, while the U.S. dollar could benefit from renewed demand for safe-haven assets.
Trump Responds to Iran-Oman Talks with Threats to Bomb Oman
U.S. President Donald Trump has escalated his rhetoric toward Oman, threatening military action if Muscat interferes with efforts to reach an agreement with Iran over the future of navigation through the Strait of Hormuz. The remarks came as Iran and Oman continued discussions on reopening the strategic waterway to commercial shipping.
Trump made the comments during an interview with Fox News, warning that the United States could target Oman militarily if he believed Muscat was obstructing negotiations between Washington and Tehran. Trump said Oman should not “stand in the way” of reaching an agreement, marking a sharp escalation in tensions between Washington and its Gulf ally.
The threats came as Iran and Oman held talks on arrangements to manage and secure shipping through the Strait of Hormuz, one of the world’s most important energy corridors. Oman has been seeking an arrangement that would allow commercial shipping to resume, while Washington has been pressing for conditions regarding freedom of navigation through the strategic waterway.
Trump’s remarks represent a significant shift in Washington’s tone toward Oman, which has historically played an important mediating role between the United States and Iran. The threats also come as U.S.-Iranian negotiations remain stalled following the expiration of the temporary ceasefire without a final agreement.
Trump had previously said that the United States would not extend the ceasefire agreement with Iran, while Tehran warned that it could adopt a more aggressive military posture if diplomatic efforts failed. An Iranian official said the country could move toward a “fully offensive” stance if the diplomatic process continued to stall.
The Strait of Hormuz has become increasingly important for global markets as shipping disruptions continue. A significant share of global oil trade passes through the waterway, and oil prices rose on Tuesday to their highest levels in around three weeks as hopes for a rapid U.S.-Iran agreement faded and concerns over supply disruptions increased.
The U.S. threat against Oman adds to geopolitical uncertainty across the Gulf region. Any further military escalation near the Strait of Hormuz could disrupt tanker traffic and global oil and gas supplies, potentially supporting energy prices and increasing volatility across financial markets.
Oil Prices Rise Amid Supply Concerns
Oil prices rose during Tuesday’s trading session, extending gains for a third consecutive session as concerns over global energy supplies intensified amid fading hopes for a U.S.-Iran peace agreement and continued disruptions to shipping in the Middle East.
Brent crude futures climbed to around $91.22 per barrel, while West Texas Intermediate (WTI) futures rose to approximately $85.31 per barrel, with both benchmarks approaching their highest levels in nearly three weeks.
The gains came as supply concerns increased after the United States ruled out extending its ceasefire agreement with Iran, while Tehran signaled that it could adopt a more aggressive military stance if diplomatic efforts fail. The developments have raised concerns that the conflict could continue for longer and disrupt oil flows across the region.
The Strait of Hormuz remains at the center of concerns in the energy market, as shipping data showed that vessel traffic through the strategic waterway remains significantly below normal levels. Six vessels carrying commodities crossed the strait on Monday, compared with an average of 11 vessels during the previous 10 days, while no very large crude carriers or liquefied natural gas carriers were recorded during the same period.
A vessel was also attacked by an unidentified projectile while departing the Strait of Hormuz on Tuesday, causing damage to its engine room and resulting in one crew member being injured, according to the United Kingdom Maritime Trade Operations center. The incident has added to concerns over the safety of commercial shipping through one of the world’s most important energy routes.
The developments come as Iran and Oman continue discussions over arrangements to manage shipping through the Strait of Hormuz, while statements by U.S. President Donald Trump targeting Oman have raised further concerns over the prospects of reaching an agreement that would allow shipping activity to return to normal levels.
Investors are closely watching developments in U.S.-Iran negotiations. Continued diplomatic deadlock could keep the geopolitical risk premium elevated in energy markets. Analysts expect that prolonged disruptions to shipping or a further escalation in military tensions could push oil prices higher, while a diplomatic breakthrough and the restoration of normal traffic through the Strait of Hormuz could ease upward pressure on crude prices.
The developments are also affecting broader financial markets, with concerns that elevated energy prices could add to global inflationary pressures. Investors are therefore monitoring U.S. monetary policy expectations and the potential impact of persistent geopolitical tensions on global economic growth.
Looking Ahead
Markets are awaiting the release of the latest U.S. Industrial Production data, which is expected to provide further insight into the health of the American manufacturing and industrial sectors. Investors will closely assess the figures for signs of changes in economic momentum, particularly as expectations surrounding U.S. monetary policy remain a key driver of market sentiment. A stronger-than-expected reading could reinforce expectations of resilient economic activity, while a weaker result may increase concerns about slowing growth and influence expectations for future interest-rate decisions by the Federal Reserve.