On Thursday, as the US-Iran conflict reached its 146th day, international leaders continued to advocate for renewed truce and ceasefire negotiations despite ongoing heavy combat.
Earlier on Thursday, Trump said in a post on Truth Social that a landmark deal with Saudi Arabia allowing Riyadh to develop a civilian nuclear programme was conditional on the Gulf kingdom joining the Abraham Accords.
Riyadh has not publicly responded to Trump’s comments. However, Saudi Arabia has maintained that it will not recognise Israel until a viable pathway to an independent Palestinian state is established.
Trump did not suggest the deal was conditional on Riyadh joining the Abraham Accords when it was announced on Wednesday. Currently, the UAE, Bahrain, Sudan, Morocco and Kazakhstan are signatories to the accords.
At the same time, Israeli Prime Minister Benjamin Netanyahu says that if Saudi Arabia joins the Abraham Accords, it would be “an historic leap forward for peace in the Middle East”.
Meanwhile, the US bombs Iran for the 12th consecutive night, killing at least two people and wounding 11 others in an attack on the Shalamcheh border crossing with Iraq.
Undoubtedly, oil has topped $100 a barrel for the first time since May, as the widening conflict in the Middle East threatens a further squeeze on global supplies.
, the global oil benchmark, jumped more than 6% Thursday to briefly touch $100.14 a barrel, before pulling back just a bit. , the US benchmark, was up almost 5% to $90.98 a barrel.
The United States has become the supplier of last resort during the course of the Iran war, supplying jet fuel to Europe and diesel to Australia and Asia. That has kept a floor under — but it has lifted American gas and diesel prices even more. As refiners make more jet fuel and diesel for foreign markets, they have made less gasoline.
Meanwhile, recent threats by Yemen’s Iran-backed Houthis to impose a maritime blockade on Saudi Arabia jeopardize regional stability and “constitute a dangerous escalation,” the European Union’s foreign policy chief Kaja Kallas said.
The European Central Bank left unchanged as widely anticipated on Thursday, warning of uncertainty around an energy price shock driven by the ongoing war in the Middle East, leaving open the possibility of a borrowing cost hike later this year.
The ECB’s decision drove short-dated to two-year highs and lifted benchmark to their highest levels since January 2025.
In Europe, borrowing costs pushed sharply higher after the European Central Bank left key interest rates unchanged at 2.25% as expected, but explicitly warned that “the full inflationary impact of the energy shock has yet to play out”.
The U.S. and Iran showed little sign of returning to negotiations as hostilities intensified. At the same time, Yemen’s Iran-backed Houthis claimed responsibility for attacks on tankers transiting the Red Sea, raising fresh concerns over disruptions to crude shipping flows out of the Gulf.
Speculation has swirled around whether the , keen to corral inflation pressures, will hike borrowing costs this year. This could bode poorly for gold, as higher rates typically weigh on non-yielding assets by increasing their opportunity cost.
has held above the psychologically important $4,000 level this week after tumbling sharply from its January record high, with traders watching whether the metal can build enough momentum to challenge resistance near $4,200.
Despite all the signs of escalation, the strategic reality remains unchanged. The U.S. cannot impose a new regional order through military force alone, nor can Iran sustain an indefinite, open-ended confrontation, given the economic and military pressures it is facing.
On Thursday, fell more than 2%, despite a rally, after testing lows at $3,966.16 on July 17, just above the key support at $3,955, where a breakdown could turn this slide steeper, as the U.S. Federal Reserve concludes its verdict in its meeting on July 27-28.
On the daily chart, gold futures, after opening the day at $4,135.67, reached a day’s high at $4,143.76 and a day’s low at $4,042.65. are trading at $4,060.65, and trying to hold the immediate support at $4,042.80, where a breakdown could push the futures to pierce the key support at $3,955.16 before this week’s closing, as the overstretched geopolitical concerns could push the inflationary pressure beyond control of the global central banks.
I conclude that the building bearish pressure due to energy-driven inflationary pressure could continue to trigger repeated sell-offs till Fed’s meet next week.
