Oil prices jump as tensions between the US and Iran continue

Oil prices surged, with Brent crude rising above $111 per barrel and WTI climbing above $107, as fears of supply disruptions intensified.

The continued closure of the Strait of Hormuz and U.S. blockade of Iranian ports pushed oil prices to a two-week high, fueling inflation concerns and strengthening expectations that the Federal Reserve could maintain a hawkish stance or even raise rates in 2026. Markets are now pricing in more than a 50% chance of a Fed rate hike by year-end, supporting Treasury yields and the U.S. dollar.

This rise in the US dollar pressured gold prices, which recovered slightly in the past few hours after falling to their lowest level since late March, but upside momentum remained limited as the U.S. dollar stayed strong amid rising geopolitical tensions and higher oil prices.

Japan‘s Nikkei 225 lost nearly 1%, Hong Kong’s Hang Seng dripped 1.4%, China‘s CSI 300 declined 0.8%, South Korea’s Kospi outperformed and reversed earlier losses to close higher by 0.9%.

The market remains focused on escalating Middle East risks. President Donald Trump also warned Iran to move quickly toward a deal or face severe consequences, increasing fears of further escalation and reducing hopes for a U.S.-Iran agreement.

The stronger dollar and higher interest rate expectations continued to pressure non-yielding assets like gold, keeping the broader outlook cautious despite safe-haven demand linked to geopolitical uncertainty.

Investors are now watching this weeks FOMC minutes, global PMI data, and further geopolitical developments for direction in gold and broader financial markets.