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Houthi armed forces join the Iran war, low buying drives up gold prices, the United States may prepare for ground combat
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Hello everyone, today XM Forex will bring you "[XM Foreign Exchange Market xmaccount.commentary]: Houthi armed forces join the Iran war, low-price buying drives up gold prices, and the United States may prepare for ground xmaccount.combat." Hope this helps you! The original content is as follows:
In early trading in the Asian market on Monday (March 30, Beijing time), spot gold was trading around US$4,483 per ounce. Although the price of gold rose last Friday due to bargain hunting, the situation in the Middle East became tense again over the weekend, and the Houthi armed forces joined in the attack on Israel. , increasing the risk of uncertainty, the market has xmaccount.completely ruled out the possibility of a U.S. interest rate cut in 2026; U.S. crude oil opened up more than 2% on Monday, trading around $102.23 per barrel. The Israeli military said over the weekend that it would attack Iran’s temporary xmaccount.command center, and the Pentagon may be preparing for several weeks of ground operations in Iran.
Focus on the day
The stock market
U.S. stocks fell sharply last Friday. The three major indexes fell for the fifth consecutive week, setting a record for the longest losing streak in nearly four years. They all closed at their lowest point in more than seven months. The Dow Jones Industrial Average fell sharply last Friday. The historical closing high fell by more than 10% and closed at 45166.64 points, confirming that it has entered the correction range. The Nasdaq index has also fallen below the correction threshold before, closing at 20948.36 points, and the S&P 500 index closed at 6368.85 points.
The war in the Middle East that has lasted for more than a month has suppressed market risk appetite. After Iran rejected the U.S. proposal to end the war, Trump announced that he would give Iran another 10 days to reopen the Strait of Hormuz or face the destruction of its energy facilities. U.S. Secretary of State Rubio said that the goal can be achieved without ground troops and the operation will be xmaccount.completed within weeks, but the market was not xmaccount.comforted.
The panic index VIX closed at 31.05 points, the highest since April 21. Super large technology stocks drag down the index: Nvidia fell 2.2%, AsiaAmazon's 4% plunge dragged the consumer discretionary sector down 3.1%, making it the worst-performing sector; software stocks were also sold off, with the S&P 500 Software and Services Index closing at its lowest since November 6, 2023.
The market's expectations for the Fed to cut interest rates have been reversed: before the conflict, it was expected to cut interest rates twice this year. Currently, the FedWatch tool shows that it has not digested any easing actions, and the probability of raising interest rates by at least 25 basis points at the October meeting is about 25%. U.S. consumer confidence fell to a three-month low in March. SlateStoneWealth strategists said that the overall market sentiment has turned extremely pessimistic, but believes that this may be a major opportunity and does not rule out a decline of 15%-20% before the adjustment ends.
Gold Market
Gold prices surged nearly 3% last Friday, driven by bargain hunting, while investors also paid attention to tensions in the Middle East.
RJOFutures senior market strategist said that after the price falls below the 200-day moving average, it is an excellent time to buy gold. Gold prices may slowly rise in the next few weeks, and risk appetite is expected to increase if the situation in Iran eases.
In terms of conflicts in the Middle East, Iran rejected the 15-point ceasefire proposal proposed by the United States, but US President Trump extended the deadline to attack Iran's energy facilities to April 7, requiring it to reopen the Strait of Hormuz; oil prices remain above US$110 per barrel, and the four-week conflict has spread to the entire Middle East, with soaring energy and fertilizer prices exacerbating concerns about inflation.
CME Group’s FedWatch tool shows that traders have xmaccount.completely ruled out the possibility of a U.S. interest rate cut in 2026, xmaccount.compared with two rate cuts expected before the war.
However, xmaccount.commerzbank raised its year-end gold price target to US$5,000 per ounce (originally US$4,900), believing that the recent decline is unlikely to be sustained; the bank expects that the Iran war will end in the spring, and the Federal Reserve will restart interest rate cuts later this year, with a total of about 75 basis points of interest rate cuts by the middle of next year.
In terms of other precious metals, spot silver rose 2.2% to US$69.54, spot platinum rose 2.3% to US$1,868.89, and palladium rose 1.8% to US$1,377.25.
Oil Market
Oil prices rose last Friday and recorded weekly gains. Affected by traders' skepticism about the prospects of a ceasefire in the Iran war, Brent crude oil futures closed up 4.2% at US$112.57 per barrel, and US crude oil futures closed up 5.5% at US$99.64 per barrel.
Traders were wary of Trump's xmaccount.comments on Iran talks, with one Iranian official calling the U.S. proposal "unilateral and unfair" and another senior official saying it was "unacceptable" for the U.S. to attack Iran while calling for talks. Tehran has not yet decided whether to respond.
StoneX analysts pointed out that investors focus on the protracted nature of the war rather than the headlines, and a prolonged blockade of the Strait of Hormuz or damage to infrastructure will maintain a significant risk premium in prices. Although Trump extended Iran's reopening of the Strait of Hormuz (otherwise it wouldsource facilities will be destroyed), but the United States has sent thousands of additional troops to the Middle East and is weighing whether to use ground forces to seize Iran's strategic oil hub Kharg Island.
Ritterbusch & Associates believes the oil market will become immune to Trump’s conciliatory rhetoric, especially given his intention to send an additional 10,000 troops. The Iran crisis has reduced global oil supply by about 11 million barrels per day, and the International Energy Agency said the crisis is more serious than the two oil crises of the 1970s xmaccount.combined.
Macquarie analysts said that if the war begins to subside soon, oil prices will fall rapidly but remain higher than pre-war levels; if the war continues until the end of June, oil prices may rise to $200. Separately, Russian oil producers have warned buyers that force majeure may be declared on supplies from major Baltic Sea ports in light of Ukraine's attacks on Russian energy infrastructure.
Foreign Market
The U.S. dollar index rose last Friday, recording its largest monthly gain in nearly a year, driven by safe-haven demand; the war in the Middle East escalated and hopes of easing the situation faded. At the same time, rising market expectations for U.S. interest rate hikes this year also supported the U.S. dollar.
The U.S. dollar index rose 0.3% to 100.17. It has risen 2.57% so far in March and is expected to have its best monthly performance since July 2025. The Japanese yen has been particularly under pressure, falling 0.34% against the US dollar to 160.35 yen, falling below the 160 mark for the first time since July 2024, increasing the possibility of Japanese authorities intervening in the currency market; the yen has fallen 2.74% this month, and Japan's high dependence on imported energy makes it more susceptible to price increases than many major economies.
In terms of market sentiment, Iran is expected to make a counter-proposal to the US ceasefire proposal on Friday. US Secretary of State Rubio said that the war is expected to last weeks rather than months and does not require ground troops. However, the Iranian Revolutionary Guard reiterated that it will ban all ships related to US and Israeli allies from passing through the Strait of Hormuz.
The "Wall Street Journal" reported that the Pentagon is considering sending up to 10,000 additional ground troops to the Middle East, further dampening hopes that the war will end in the short term. The U.S. consumer confidence index fell to a three-month low in March as the war pushed up oil prices and weighed on the economic outlook.
In other currencies, the euro fell 0.17% to US$1.1509, and the pound fell for the fourth consecutive day, down 0.48% to US$1.3268. The risk-sensitive Australian dollar fell 0.2% to US$0.687, hitting a two-month low during the session. It has depreciated about 3% since the outbreak of the war, and is only better than the Indian rupee (down 5.37%) among major currencies.
In terms of interest rate expectations, federal funds rate futures have xmaccount.completely reversed previous predictions of another interest rate cut this year, and market speculation has shifted to an interest rate hike; the Bank of England and the European Central Bank are also expected to tighten policies, hitting the bond market hard this month and pushing yields to multi-year highs.
International News
Iran says it is monitoring the USS Lincoln aircraft carrier in real time and will launch missiles once it enters range.
Iranian Navy xmaccount.commander Shahram Irani said on the 29th local time that Iran is monitoring the location and movements of the USS Lincoln aircraft carrier group in real time as well as its requests to countries in the region. Once the "Lincoln" aircraft carrier formation enters Iran's range, Iran will launch missiles. (CCTV News)
Israel is trapped in a multi-front war of attrition
On March 28, local time, Israel was attacked simultaneously on three fronts: Iran, Lebanon and Yemen. According to Israeli military monitoring, from the early morning of March 28 to the early morning of March 29, at least multiple rounds of missile attacks occurred, covering southern, central and Jerusalem areas of Israel. An Israeli village was hit by a missile, injuring at least 11 people and causing extensive damage to multiple buildings within a radius of about 150 meters. The Israeli military admitted that its air defense system failed to intercept the missile and is still investigating the cause of the failure. And this was also a week ago, when the southern interception failed and its air defense system once again had a leak. In the Lebanese direction, Israel claimed to have killed at least 800 Hezbollah militants in southern Lebanon. On the same day, the Israeli army confirmed that Lebanese Hezbollah fired about 250 rockets at Israeli targets, causing frequent sirens in northern Israeli towns. In addition, during the operation in southern Lebanon, the Israeli army encountered an attack, resulting in one death and many injuries. In the direction of Yemen, the Houthi armed forces once again launched ballistic missiles and drones towards southern Israel on the 28th. Although the Israeli army stated that it successfully intercepted the attack, there is no doubt that Israel is facing a broader and more protracted war of attrition.
The above content is all about "[XM Foreign Exchange Market xmaccount.commentary]: Houthi armed forces join the Iran war, low-price buying drives up the price of gold, and the United States may prepare for ground xmaccount.combat". It is carefully xmaccount.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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