President Donald Trump stated on Monday that the United States would either reach a deal with Iran or “finish the job,” thereby renewing his threat of military action as Tehran projected defiance following the funeral of Supreme Leader Ayatollah Ali Khamenei.
Indirect U.S.-Iran talks ended last week without any public sign of headway toward a lasting peace, despite a 60-day ceasefire intended to create space for diplomacy following the U.S. and Israeli strikes that triggered the conflict.
“We’re either going to make a deal, or we’re going to finish the job. OK. And it won’t be tough to finish the job. I’d rather make a deal, because I don’t want to affect 91 million people,” Trump told reporters in the Oval Office.
“We can knock down their bridges in one hour; we can knock out their energy supply…. They don’t have any money now. We haven’t given them any money.”
Secretary of Iran’s Supreme National Security Council, Mohammad Baqer Zolqadr, called Trump’s threat “delusional.”
“Iranians are unfamiliar with the language of threats. So speak to the Iranian people with respect, otherwise we will respond in another language,” Zolqadr said in comments carried by state media.
Trump spoke after Khamenei’s weekend funeral, where, rather than looking weakened by the war that began with U.S. and Israeli strikes on February 28, Iranians appeared to be defiant, united and determined to shape what comes next.
The 60-day ceasefire was intended by Washington to revive diplomacy on stopping Iran from developing a nuclear arsenal.
The administration’s shift from military posturing to economic engagement has signaled a significant diplomatic pivot, leading to cooling relations with Israeli Prime Minister Benjamin Netanyahu.
Most Asian currencies traded in a tight range on Tuesday, while the dollar steadied ahead of further Federal Reserve cues on U.S. interest rates this week.
The Japanese yen firmed slightly after strong wage income data. But the currency remained pinned near 40-year lows, with markets watching for any more currency market intervention from Tokyo.
Asian currencies found some strength late last week after soft nonfarm payrolls data battered the dollar. But the greenback steadied after the long weekend, while gains in most regional units petered out.
Caution over renewed attacks in the Strait of Hormuz also weighed on local markets, with oil prices rising after reports showed Iran had struck vessels in the waterway.
The moved little in Asian trade after logging steep losses last week on soft payrolls data.
The print raised some questions over just how much headroom the Fed has to hike rates this year. But the dollar’s losses were limited by bets that sticky inflation will still keep the central bank hawkish in the coming months.
Focus now turns to the minutes of the Fed’s June meeting, due on Wednesday, for more cues on interest rates. Focus will also be on the tone of the minutes, given that they are the first under new Chair Kevin Warsh.
The Fed’s June meeting showed an increasing number of policymakers in favor of hiking interest rates this year.
prices fell in Asian trade on Tuesday, cutting short a recent recovery as markets remained uncertain over U.S. interest rates and inflation.
Reports of a vessel being struck in the Strait of Hormuz revived concerns over energy market disruptions and their effects on inflation, keeping the dollar upbeat and pressuring metal markets.
On evaluating the movements of the gold futures on different time pattern charts, I find that the influence of prevailing uncertainty of the peace deal and opening of the Strait of Hormuz is clearly visible over the surging bearish pressure on gold futures on Tuesday, when the U.S.-Iran conflict has reached its 131st day, as I explained the resulted impact of this delay in resolving this issue, in my previous analysis (https://www.investing.com/analysis/gold-bearish-momentum-builds-as-inflation-pressures-persist-200683390 ) in detail.
Technical levels to watch
On a daily chart, after opening at $4,167.84, tested the day’s high at $4,174.26, and the day’s low at $4,127.70, gold futures are trading at $4,156.36, trying to hold the immediate support at the 9 EMA ($4,134), and facing significant resistance at the 20 EMA ($4,190), signaling a surge in weakness, as both the 9 EMA and 20 EMA, trading below the key support at the 200 EMA ($4,304.91), have formed a “Bearish Crossover” on the daily chart.
On the 4-hr. chart, gold futures are trying to hold the key support at the 50 EMA ($4,126.73), where a breakdown could push gold futures to test the next support at $4,024.
Disclaimer: Readers are advised to take any position in gold at their own risk, as this analysis is based solely on observations.
