On Monday, as the US-Iran conflict entered its 142nd day, the ceasefire had collapsed and energy-driven inflation continued to complicate the Federal Reserve’s policy decisions, with only seven days remaining until the next scheduled event.
The optimistic narrative regarding an imminent, lasting settlement between Tehran and Washington has evaporated. The region has reverted to the alarming situation that prevailed at the onset of the conflict between the U.S. and Iran in February: missile launches, reciprocal strikes, and an escalation that threatens the security of the Gulf and Jordan, as well as the stability of global energy markets.
It is as if the Middle East wanted to remind everyone of some hard truths often overlooked by international diplomacy: a ceasefire does not constitute peace, a truce is not a formal agreement, and a temporary silencing of the guns does not signify an end to the war.
More alarmingly, Iran has resumed targeting Gulf Arab capitals, citing the same justifications it has used since the crisis began, based on claims that certain civilian facilities serve military or logistical functions.
The reality, however, was different: the strikes hit power plants, water facilities, oil infrastructure, and other vital installations. It is worth noting that in Kuwait, desalination meets 90% of the population’s water needs.
In Bahrain, too, desalination plants are responsible for over 80% of the water supply. These attacks prove that this conflict no longer targets only military forces—it is instead testing the very resilience of these nations by targeting their way of life.
What happened was not a sudden collapse of the U.S.-Iran Memorandum of Understanding of June 17, but rather a predictable outcome of how the negotiations were conducted.
Merely sitting around the negotiating table is not, on its own, enough to resolve a conflict. International relations cannot be managed through vaguely drafted terms but require clear, precise language.
Furthermore, diplomatic efforts require a genuine will to reach a settlement, one that transcends press conferences and token meetings, as well as a focus on the foundational pillars of understanding and the parties’ capacity to implement it.
An agreement that allows each side to claim victory is not a diplomatic success: it is a temporary compromise that is destined to collapse, particularly when each party interprets its terms to suit its own interests. This represents one of the most significant and perilous challenges posed by the June 17 MoU: its ambiguity may have facilitated the signing of a deal, but it also undermined the likelihood of its implementation.
The memorandum between Washington and Tehran has demonstrated that the problem lies not in the absence of an agreement, but in the absence of a clear one. Consequently, one article of the accord effectively turned into a source of renewed political, military, and diplomatic conflict.
The nature of the crisis between Washington and Tehran has evolved. In the past, it was disputes over uranium enrichment, sanctions, Iran’s missile program, and regional influence that sparked military confrontations.
Today, however, the problem runs deeper—there is a crisis of confidence in the agreement itself.
Iran believes the U.S. will reinterpret the text to suit its political interests.
Meanwhile, Washington suspects that Tehran is using every lull in hostilities to regroup and bolster its military capabilities.
Consequently, it is becoming increasingly difficult to reach a new agreement, as there is not only a dispute over the specific provisions of the MoU, but a crisis of faith in the value of the document itself. This represents a critical risk for the negotiation process: a lack of trust not only hinders the implementation of the current agreement but also prevents the conclusion of a new one.
I find that if President Trump still attempts to negotiate or threatens Iran to come back to the negotiation table, it could trigger a more severe situation for both the nations, as now the basic aim of denuclearization has shifted towards holding control over the Strait of Hormuz, while Iran would never allow anyone’s interference in its sovereignty, as the Strait of Hormuz is a part of its territory.
This revives a perennial question that arises with every escalation in the Gulf: Can military force alone guarantee confidence in the validity of international agreements and the rule of international law—particularly regarding the security of navigation via the Strait of Hormuz?
The realistic answer is far more complex than the political rhetoric suggests. While U.S. naval forces may have the capacity to escort vessels, intercept attacks, and secure temporary corridors, they cannot—on their own—bring about lasting stability in one of the world’s most vital maritime passages.
And, the stability is not created merely by the presence of naval fleets, but by political and legal frameworks that all sides agree to respect. In the absence of such frameworks, any military operation will remain a stopgap measure, and any success on the ground will be merely tactical, never evolving into a sustainable security architecture.
Therefore, the belief that the Strait of Hormuz can be kept open through force alone is not a long-term strategy. It is a bet that the crisis can be managed, rather than resolved.
Undoubtedly, armies may destroy military bases, shoot down drones, or intercept missiles, but they cannot establish a stable political order.
Modern history demonstrates that while force can alter the course of battles, it is far less capable of building the foundations of peace.
Consequently, any renewed U.S.-Iranian military confrontation, regardless of the successes it may achieve, will not, on its own, produce a lasting regional security architecture.
Ultimately, the two sides will find themselves compelled to return to the very negotiating table they previously abandoned, but with greater losses and diminished trust, and to draft more complex terms. Wars shift the positioning of military forces, but they do not eliminate the need for diplomacy.
I feel that if such a scenario emerges this week, could experience wobbly moves till the US Federal Reserve’s meeting on July 27-28, 2026.
Technical Levels to Watch
On the daily chart, after opening the day at $3,999.12, testing the day’s high at $4,045.20 and the day’s low at $3,987.20, gold futures are trading at $4,012.70, signalling weakness as the daily candle has turned into a “Bearish Hammer”, where a breakdown below the key support at $3,955.16 could trigger selling this week.
Conversely, any breakout above the immediate resistance at the 9 EMA ($4,050) could keep the momentum bullish, while the bears would prefer to load fresh shorts on any attempt to test the next resistance at the 20 EMA ($4,105), with a stop-loss at the next resistance at the 50 EMA ($4,266).
On the 1-Hr chart, after the formation of a bearish hammer by the hourly candle, formed at 7:00 P.M., and the gold futures found a steep fall at 8:00 P.M., that pushed the futures to test the immediate support at $4,012.30, confirmed continuity of selling pressure, and the 9:00 P.M. candle is trying to hold this key support, despite the formation of one more bearish hammer, and here a breakdown could extend the selling spree to retest the Friday’s low at $3,962.
