Oil prices soared nearly 4%, driven by safe-haven demand; gold prices held firm at the 4,500 mark; concerns about Red Sea shipping intensified

Basic news

In early trading in the Asian market on Tuesday (March 31, Beijing time), spot gold was trading around US$4,518 per ounce. The price of gold rose for the second consecutive trading day on Monday, mainly driven by the hedging demand caused by the continued conflict in the Middle East. , although the market no longer expects the Federal Reserve to cut interest rates this year; U.S. crude oil is trading around $106.08 per barrel, and oil prices rose nearly 4% on Monday. The Houthi armed forces in Yemen launched their first attack on Israel, further expanding the conflict in Iran and exacerbating market concerns about Red Sea shipping and oil transportation routes around the Arabian Peninsula.

Stock Market

Most of the major U.S. stock indexes closed lower on Monday. The Dow Jones Industrial Index rose slightly by 0.11% to close at 45216.14 points, the S&P 500 Index fell by 0.39% to 6343.72 points, and the Nasdaq Index fell by 0.73% to 20794.64 points.

Investors are weighing U.S. President Trump’s remarks on Iran and the contradictory signals they trigger: On the one hand, Trump said he would engage in serious negotiations with “more rational regimes” to end the war, but on the other hand, he warned that the United States would launch attacks on Iran’s oil wells and power plants if it did not open the Strait of Hormuz. In addition, the Iranian-backed Houthi armed forces in Yemen intervened in the conflict over the weekend, and the war in the Middle East continued to escalate, causing oil prices to soar and exacerbating inflation concerns, unnerving the market.

While technology stocks and semiconductor indexes were weak and the energy index also fell, financial indexes rose as the U.S. Labor Department issued guidance on including alternative assets in 401(k) plans.Opinions rose 1.1%.

Federal Reserve Chairman Powell said that long-term inflation expectations have stabilized and that the Fed does not need to take action for the time being, which has provided some support for the stock market. However, money market participants no longer expect the Fed to cut interest rates this year.

Gold Market

Gold prices rose for the second consecutive trading day on Monday, with spot gold closing up 0.6% to $4,518.57 an ounce, and U.S. gold futures rising 0.7% to $4,557.50, mainly driven by safe-haven demand triggered by continued conflicts in the Middle East.

U.S. President Trump issued a new warning to Iran, saying that unless Iran opens the Strait of Hormuz, it will destroy its oil wells and power plants, while Iran calls the U.S. peace proposal unrealistic and launches missiles to Israel, exacerbating market concerns about inflation and rising global interest rates.

Despite the recent rebound, gold prices have fallen more than 14% so far in March and are on track for their worst monthly performance since 2008 as soaring energy prices prompt the market to reassess interest rate expectations.

Federal Reserve Chairman Powell said that policy is in a good position and will pay close attention to the impact of the war on the economy. This week the market will focus on economic data such as U.S. job openings, retail sales, ADP employment and non-farm payrolls.

In terms of other precious metals, spot silver rose 1% to $70.27, platinum rose 1.6% to $1,891.71, and palladium rose 2.9% to $1,416.47.

Oil market

Oil prices closed higher on Monday, with the settlement price of U.S. crude oil futures exceeding $100 per barrel for the first time since 2022, and Brent crude oil futures set to record a record monthly gain, mainly due to the first attack by the Houthi armed forces in Yemen on Israel, which further expanded the conflict in Iran and intensified market concerns about Red Sea shipping and oil transportation routes around the Arabian Peninsula.

U.S. crude oil futures closed up 3.3% at US$102.88 per barrel, the highest level since July 2022; Brent crude oil futures closed up 0.2% at US$112.78, once touching US$116.89 during the session. So far this month, affected by Iran's de facto closure of the Strait of Hormuz, Brent crude oil has risen by about 57%, the largest monthly increase since records began in 1988, while U.S. crude oil has risen by 53%, the largest monthly increase since May 2020.

U.S. Treasury Secretary Bessent said that the global oil market is adequately supplied, and the G7 finance ministers also stated that they are ready to take all necessary measures to maintain the stability of the energy market, while Federal Reserve Chairman Powell said that he will wait to observe the impact of the war on the economy and inflation, and will not consider raising interest rates for the time being.

Foreign Market

The U.S. dollar index rose 0.22% on Monday, hitting its highest level since May 19, while the euro fell 0.44% against the U.S. dollar to $1.1457, affected by concerns that the continued war between the United States, Israel and Iran may drag down economic growth.

US President Trump threatens to destroy Iran if it does not open Strait of HormuzIts energy facilities, while rising oil prices have exacerbated inflation concerns and also raised concerns about energy costs harming consumers and economic growth. State Street Global Markets strategists said investors are beginning to pay attention to the growth dimension, especially worried about the prospects of more fragile economies such as the United Kingdom and the European Union.

The U.S. dollar also benefited from safe-haven buying and the U.S.'s relative advantage as a net energy exporter. Federal Reserve Chairman Powell said he would wait and see the impact of the war on the economy and inflation, while federal funds rate futures traders have withdrawn their expectations for an interest rate cut within the year.

The Japanese yen rose 0.42% to 159.63 yen against the US dollar. It once exceeded the 160 mark. Officials from the Japanese Ministry of Finance issued the strongest warning of intervention so far. The governor of the Bank of Japan also said that the inflationary pressure caused by the weak yen may provide the basis for future interest rate increases. GBP/USD fell 0.57% to $1.3181, while the Australian and New Zealand dollars fell to two-month and four-month lows respectively.

International News

The probability of the Federal Reserve keeping interest rates unchanged in April is 97.4%, and the probability of raising interest rates in December has dropped to 4%.

According to CME "Fed Watch": The probability of the Federal Reserve raising interest rates by 25 basis points in April is 2.6%, and the probability of keeping interest rates unchanged is 97.4%. The probability that the Fed will cut interest rates by 25 basis points cumulatively by June is 5%, the probability of keeping interest rates unchanged is 92.5%, and the probability of raising interest rates by 25 basis points cumulatively is 2.5%. The probability that the Fed will cut interest rates by 25 basis points cumulatively by December is 14.1% (1.3% the day before), the probability of keeping interest rates unchanged is 82% (74% the day before), and the probability of raising interest rates by 25 basis points has dropped to 4% (24.6% the day before last week) Once as high as 40%)

Iran’s First Vice President warned the United States: sending troops to Khark Island will lead to no return

On March 30, local time, Iran’s First Vice President Aref warned U.S. President Trump not to send troops to attack Iran’s Khark Island. Aref said that Trump can decide whether to send troops to Khalk Island, but whether to withdraw troops from there will not be controlled by the United States, because "no one can xmaccount.come back alive from hell." Khark Island is located in the northwest of the Persian Gulf, about 25 kilometers away from the coast of Iran, about 6 kilometers long and 3 kilometers wide. It is Iran's largest crude oil export base, and 90% of Iran's crude oil is exported from here.

European officials: Iran is putting pressure on the Houthis to take action against Red Sea shipping

According to informed European officials, Iran is putting pressure on the Houthis and is preparing to restart operations against Red Sea shipping. Whether it is implemented will depend on whether the U.S. war against Iran further escalates. Leaders of the Iran-backed Houthis in Yemen are considering more aggressive action after launching ballistic missiles at Israel, people familiar with the matter said. Disagreement within Houthi leadership over the aggressiveness of the operation was part of the reason the group did not intervene until a month after the conflict began, the person said. The Houthis issued a statement on Saturday saying they would continue militaryAction until the United States and Israel cease their attacks on Iran and its proxy forces (including Lebanese Hezbollah). The statement did not explicitly indicate that it would launch attacks on oil tankers and other ships passing through the Red Sea. The above-mentioned people also said that U.S. and Saudi officials have informed European allies that they believe that the Houthis currently want to avoid further escalation of the situation and will not attack U.S. and Saudi-related targets for the time being.

Iran’s parliament approved the imposition of tolls on the strait, which must be paid in Iran’s local currency

On Monday local time, the Iranian parliament passed a bill to impose tolls on ships passing through the Strait of Hormuz. The toll for an oil tanker can be as high as $2 million. According to Iranian media reports citing officials from the Iranian Parliament’s National Security and Foreign Policy xmaccount.committee, the new navigation control plan also includes prohibiting ships related to the United States, Israel or countries that have previously imposed unilateral sanctions on Iran from passing through the channel, and the passage fees must be paid in Iranian rial. Iran will work with Oman to develop the relevant legal framework. Shortly before the bill was approved, the White House said the United States did not support Iran's imposition of tolls.

Federal Reserve Chairman Powell: The balance sheet is an effective tool

Federal Reserve Chairman Powell on Monday defended the Fed's asset purchases while acknowledging that there is still uncertainty about how much this action will help the economy. Speaking at Harvard University, Powell said that the Fed implemented asset purchases during times of severe stress, "We have indeed not yet seen the downside risks." He also said, "The purchase of long-term assets will indeed lower interest rates and indeed provide some support for economic activity."

Iran accuses Ukraine of participating in military operations against Iran

On the 30th local time, Iran's Permanent Representative to the United Nations Iravani wrote to the United Nations Secretary-General and the Security Council, accusing Ukraine of participating in military operations against Iran by sending personnel to the region. Iravani stated in the letter that Ukraine admitted to sending "hundreds of experts" to relevant areas. This move was regarded by Iran as "supporting" the US-Israeli military action against Iran and a direct participation in a country's illegal use of force.

White House: The dialogue between the United States and Iran is still ongoing and progressing smoothly

White House Press Secretary Levitt said that the dialogue between the United States and Iran is still ongoing and progressing smoothly. Levitt said that Iran had agreed to some of the key points proposed by the United States in private talks. As for the specific details, they will not be made public as negotiations are currently ongoing. On March 30, local time, Iranian Foreign Ministry spokesperson Bagaei stated that Iran has not yet conducted any negotiations with the United States.

Domestic News

The reason for the sharp plunge in the price of memory modules is suspected to be the suppression of purchase demand by individual consumers

With the outbreak of artificial intelligence xmaccount.computing power demand, global memory production capacity is in short supply, and the prices of related products have been rising, which has had a considerable impact on the consumer electronics industry. But since last week, memory market prices have dropped significantly. Huaqiang Electronic World, Shenzhen, GuangdongMerchants said that since last Wednesday, many memory products have seen price cuts. The current price of 16G memory has dropped from about 900 yuan last week to about 700 yuan currently. The price of 32G memory has also dropped by about 300 yuan. Some brands of 32G memory prices have even dropped by 30%. At present, more and more upstream dealers are more willing to ship, but the market has not heated up due to the price reduction of memory. Since the start of the memory price increase in the fourth quarter of last year, many individual consumers have suppressed their purchasing needs and have chosen to purchase memory with lower capacity or turn to the second-hand market, which has suppressed the shipment of memory products to a certain extent. Many merchants in Huaqiangbei said that last year's price increase had a significant impact on business, with transaction volume generally declining. This is also the main reason for the recent decline in memory prices.

The above content is all about "[XM Foreign Exchange Market Analysis]: Oil prices soared by nearly 4%, hedging demand pushed gold prices to stick to the 4,500 mark, and Red Sea shipping concerns intensified". It was carefully xmaccount.compiled and edited by the XM foreign exchange editor. I hope it will be helpful to your trading! Thanks for the support!

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