Escalating conflict in Iran continues to dominate global markets this week, with energy markets reacting sharply as the risk to global oil supply grows. Crude oil opened strongly this morning, pushing toward the US$110 per barrel level after closing around US$93 on Friday, a rise of roughly 18% in a single trading session, highlighting just how quickly geopolitical risk can ripple through commodity markets.
Much of the concern centres around the Strait of Hormuz, one of the most critical shipping lanes for global energy supply. Roughly one fifth of the world’s oil normally moves through this narrow corridor each day, and current conflict in the region has dramatically reduced tanker traffic and raised insurance costs for shipping companies. With some Gulf producers already slowing exports and others facing infrastructure threats, the market is now pricing in a prolonged disruption to supply.
Equity markets reacted swiftly to the surge in energy prices and geopolitical uncertainty. Both the ASX200 and the US500 have moved lower as investors shift away from risk assets and toward more defensive positions. Energy and defence sectors have shown relative strength, while broader market sentiment remains fragile as traders assess how far the conflict could spread across the region.
Despite the volatility across equities and energy markets, precious metals have remained relatively resilient. Gold and silver are holding their ground even as broader markets weaken, reflecting their long-standing role as a financial hedge during periods of geopolitical instability and currency uncertainty. While short-term price movements may fluctuate alongside broader market liquidity, the underlying demand for bullion tends to strengthen when global uncertainty rises.
With oil now trading well above recent averages and equity markets under pressure, investors are watching closely to see whether this conflict develops into a longer-term supply shock for energy markets. If the disruption to Middle Eastern oil flows persists, the resulting inflationary pressure could quickly spill into global monetary policy expectations and commodity pricing more broadly.
Technical Indicators FOR GOLD – Weekly Projections
Daily technical indicators – NEUTRAL, leading into weekly projection of STRONG BUY
Weekly technical indicators chart.
| RSI(14) | Overbought |
| STOCH(9,6) | Buy |
| STOCHRSI(14) | Buy |
| MACD(12,26) | Buy |
| ADX(14) | Overbought |
| Williams %R | Overbought |
| CCI(14) | Buy |
| ATR(14) | High Volatility |
| Highs/Lows(14) | Buy |
| Ultimate Oscillator | Buy |
| ROC | Buy |
| Bull/Bear Power(13) | Buy |
The Strait of Hormuz is one of the most strategically important waterways in the world. The narrow passage between Iran and Oman connects the Persian Gulf to the open ocean and acts as the main export route for oil producers such as Saudi Arabia, Iraq, Kuwait, and the United Arab Emirates. At its narrowest point the shipping channel is only around 3 kilometres wide in each direction.
Roughly 20% of the world’s oil supply, about 20 million barrels per day, normally moves through the strait. Because such a large portion of global energy passes through this single corridor, even small disruptions can rapidly drive oil prices higher as traders price in potential supply shortages.