On March 30, the global financial markets were dominated by geopolitical conflicts in the Middle East. Intertwined with risk aversion and supply chain concerns, this drove sharp fluctuations in energy and precious metal prices, weighed on U.S. stocks collectively, and left the market in a pattern of “rising risk aversion and correction of risky assets”. As of midday today, the international market was volatile, becoming the core focus of global investors.
In the energy market, the continuous escalation of geopolitical conflicts pushed oil prices soaring. WTI crude oil futures rose by 7% to $101.14 per barrel, while Brent crude oil approached $113 per barrel. Currently, oil prices already include a geopolitical risk premium of $15-$20 per barrel. It is reported that Saudi Arabia’s East-West Pipeline, which bypasses the Strait of Hormuz, is operating at full capacity to transport crude oil, and Iran has also allowed ships from some countries to pass through the strait in an attempt to ease supply chain concerns. However, market worries about the continuation of the conflict still support high oil prices. Meanwhile, Russia announced a temporary ban on gasoline exports starting April 1, further exacerbating expectations of tight global energy supply.
Safe-haven assets performed brightly, with gold becoming the first choice for capital seeking shelter. Spot gold traded around $4,483 per ounce, surging nearly 3% in a single day last Friday. This was driven both by safe-haven buying triggered by geopolitical conflicts and technical correction after prices fell below key moving averages. In contrast, the three major U.S. stock indexes plummeted collectively last Friday: the Dow Jones Industrial Average fell 1.72%, the Nasdaq Composite Index dropped 2.15%, and the S&P 500 Index declined 1.67%. Technology stocks were sold off due to expectations of rising interest rates, with only memory chip concept stocks rising against the trend.
Market analysts pointed out that the global market has now entered a window period where “geopolitical pricing” overrides “monetary policy pricing”. Expectations of a Federal Reserve rate cut have completely vanished, and some institutions have even started pricing in the probability of a rate hike in October. Going forward, it is crucial to focus on the April 7 deadline set by Trump for Iran and the subsequent development of the Middle East conflict. If the situation escalates further, energy and precious metal prices may continue to rise, and global stock market volatility will intensify.
