In light of ongoing geopolitical tensions, the US-Iran conflict has persisted for 130 days. The continued closure of the Strait of Hormuz disrupts global energy supplies and threatens food security by impeding the distribution of fertilizers and other essential commodities.
Moreover, despite the price reversal seen in oil now, back to pre-war levels, the conflict between the US and Iran remains unresolved, despite the signing of the Memorandum of Understanding to ease the situation through an interim peace deal on June 17, 2026.
I have already expressed concerns over efforts made by US President Donald Trump to achieve this peace deal with Iran, as he has included some clauses in the MOU, having created a “Catch-22” situation for Iran, resulting in extensive delay in the opening of the Strait of Hormuz for a long time, despite providing a 60-day road map to achieve success.
At the same time, in the U.S. Strategic Petroleum Reserve fell by 5.5 million barrels to 325.7 million barrels, the lowest level since May 1983, according to data from the Department of Energy.
The drawdowns are a part of a U.S. agreement to release 172 million barrels from the facility to plug a gap in global inventories after the Iran war and help push down fuel prices.
U.S. have rapidly declined in recent weeks due to strong export and refining demand for American oil.
Since the war began at the end of February, overall U.S. inventories, including commercial and SPR stocks, have fallen by 111.4 million barrels to 743.3 million barrels as of June 19, the lowest since 1984.
On July 3, Reuters reported that U.S. power grid operator PJM, the nation’s largest, covering much of the East Coast and Midwest, on Friday ordered customers in emergency electricity-reduction programs to curb their use, as it battled generator outages, overloaded transmission lines and surging air-conditioning demand during a prolonged heat wave.
In an emergency alert, activated in line with utilities’ conservation programs, PJM said the order applied to industrial and residential electricity users with contracts that pay them in return for mandatory consumption cuts during emergencies.
PJM also notified neighbouring regional grids, including those in New York and the Midwest, that electricity exports from PJM may be curtailed, a procedural step that allows those neighbouring regions to plan accordingly.
The power grid operator serves 67 million people in the Mid-Atlantic, South, and Washington, D.C. areas. Even before this week’s heat wave, it had been straining to overhaul a system pushed to the brink by surging energy demand from data centres and electric vehicles.
A hot weather alert remains in effect through Saturday for the entire region PJM serves, and has been extended through Sunday for the Mid-Atlantic and Dominion transmission zones, which include the world’s largest collection of data centres.
On July 5, OPEC+ agreed to a further increase in output targets from August, the group said in a statement on Sunday, adding to global supply at a time when oil prices are falling due to the gradual reopening of the Strait of Hormuz for oil exports.
The oil-producing group agreed during an online meeting to increase quotas by 188,000 barrels per day from August, on top of similar increases for June and July.
Yet the increase has remained largely on paper because of the U.S.-Israel war on Iran, which closed the Strait of Hormuz to tanker traffic for some of the most important OPEC+ members, including Saudi Arabia, Kuwait and Iraq.
On gold, the analysts maintained their $4,900 per troy ounce end-2026 forecast, anchored by emerging-market central bank diversification following the 2022 freezing of Russia’s reserves.
A record 45% of 76 central banks surveyed by the World Gold Council between February and May said they expect to increase their own gold reserves over the next 12 months.
Near-term headwinds from a hawkish Federal Reserve weigh on rate-sensitive ETF demand, with the broker expecting ETF positioning to gradually rise, consistent with a delayed easing cycle in the second half of 2027.
The analysts identified three distinct inflation regimes requiring different commodity hedges: late-cycle inflation calling for cyclical commodities, supply disruptions best hedged with a broad commodity basket excluding precious metals, and institutional credibility risk best addressed with gold.
Since first taking office, US President Donald Trump has been right on Iran more often than his critics care to admit.
From the outset, he recognised the threat posed by the regime and its nuclear program, necessarily expanded US sanctions to disrupt Iran’s malign activities, and sought a stronger nuclear deal than the imperfect one negotiated by his predecessor.
The Abraham Accords that Trump announced near the end of his first term allowed for significantly improved military coordination between Israel and the Gulf, including critical efforts to improve defences that proved invaluable when Iran twice attacked Israel directly during the Biden administration.
Trump also has made a number of correct calls on the most difficult questions involving the use of US military force against Iran, often overruling his advisors. Sometimes he has properly been more cautious; other times he has appropriately been willing to take calculated risks.
In 2019, for instance, he wisely rejected a Pentagon recommendation to strike Iran directly in response to the shootdown of a US drone, which would have been a disproportionate and thus potentially dangerous response.
Then, in 2020, he shocked the Pentagon by ordering the killing of Quds Force leader Qasem Soleimani, which materially diminished Iranian capabilities and did not immediately provoke the wider war that many had feared at the time.
That risk was mitigated when Trump refused calls to escalate further after Iran retaliated against US forces. Most significantly, Trump made the right decision last year to bomb Iran’s nuclear program, reversing his administration’s prior decision to distance itself from Israel’s earlier strikes.
But, as this year began, it was reasonable to believe that Trump was well-positioned to develop a new set of policies toward Iran to advance US interests.
Indeed, circumstances might have never been more advantageous for a shrewd combination of US power and diplomacy. Tehran’s geostrategic position had been sharply diminished in the wake of Israeli military successes against Iranian partners Hamas and Hezbollah, the fall of Iran’s ally Bashar al-Assad in Syria, Israel’s destruction of Iranian strategic air defenses, and the damage done in 2025 to Iran’s nuclear facilities.
Perhaps most importantly, there were signs that the Iranian people were poised to once again rise up against their oppressors. It was a moment to leverage US strengths in coordination with regional partners to diminish the Iranian regime’s ability to threaten both the Middle East and its own citizens.
Unfortunately, Trump did not learn from his own experiences with Iran and take advantage of this generational opportunity. Instead, he repeated many of his predecessors’ mistakes by launching a misguided war and compounding the error by agreeing to a deeply flawed ceasefire agreement.
Nevertheless, there remains a way to salvage the situation. To avoid dangerous, predictable outcomes in the months and years ahead, Trump should embrace a new negotiating approach, a new emphasis on regional security and deterrence, and a new commitment to preparing for the future—all of which could attract bipartisan support in Congress.
Novel miscalculations in the conduct of foreign policy are understandable; repeated errors are not. US policies toward Iran this year have included a series of decisions that failed to apply lessons that should have been learned from previous mistakes by Trump’s predecessors.
Trump’s approach to his fourteen-point agreement with Iran mirrors his previous twenty-point agreement on Gaza. There are some positive commonalities. Each usefully halted fighting allowed renewed transit of critically needed goods and began wider negotiations between warring parties. They also share challenges. From the beginning, for example, most observers didn’t believe either would proceed far beyond the first of the many points listed.
More significantly, the regime, following its longstanding approach, has successfully created a “new normal” in which Iranian actions that would have previously been considered casus belli have now been redefined below the threshold of war.
Every US president since Jimmy Carter and Ronald Regan determined that the United States would use military force to ensure freedom of navigation from the Gulf through international waters, but now Trump has, in effect and in writing, accepted de facto Iranian control over a vital maritime chokepoint.
This is a stark contrast from when Obama directly but privately threatened Iran about any attempts to close the Strait of Hormuz—and a complete reversal even from Trump’s April 1 address to the nation in which he promised that “when this conflict is over, the strait will open up naturally.”
I conclude that this misguided war and flawed agreement have positioned the United States and the Middle East at the threshold of a highly precarious future. This situation indicates a likely persistence of conflict, even if efforts to resolve the current crisis are ultimately successful. The conflict has already inflicted significant damage on the global economy, with consequences that may be more severe than currently recognized.
The onset of a bearish trend can be identified by analyzing the movements of across the daily, four-hour, and one-hour charts. Each of these timeframes has indicated heightened bearish pressure since the market opened today.
I find that gold futures look ready to slide below the tested lows on June 29, 2026, before today’s close, as Israel’s intentions shadow the diplomatic efforts made by the President to establish peace with Iran and reopen the Strait of Hormuz.
