The United States announced plans to intensify economic measures against Iran, including a continued naval blockade and new sanctions, amid escalating tensions across the Middle East. Markets responded swiftly, with gold heading for a strong weekly gain and oil prices moving higher on fears of supply disruptions. In contrast, Bitcoin showed limited momentum, trailing gains in other major asset classes.
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AAPLUS outlines economic and military pressure on Iran
Officials from the administration signaled a significant increase in economic pressure on Iran. Treasury Secretary Scott Bessent stated that the United States would launch economic actions “never before seen on Iran,” targeting broader financial isolation and maintaining the naval blockade around key Iranian ports.
Details of these impending measures remain undisclosed. However, Defense Secretary Pete Hegseth confirmed the military’s readiness to sustain the blockade indefinitely, with plans to rotate naval assets as required to uphold the operation.
Reports indicated that the USS George Washington is preparing to relieve the USS Abraham Lincoln in the Middle East, following the latter’s extended deployment in the region.
While Hegseth dismissed allegations of poor living conditions aboard the Abraham Lincoln, Representative Mike Levin expressed concern in a letter to Pentagon and Navy leaders. Levin highlighted complaints from military families regarding shortages, sanitation challenges, and fatigue among crew members.
US Central Command also refuted reports circulated by Iranian outlets suggesting there had been a fatal incident on the carrier, stating that no service members had died.
Mini dictionary: Strait of Hormuz, a strategically vital waterway connecting the Persian Gulf with the Arabian Sea, serves as a critical passage for global oil shipments and is often a flashpoint for regional tensions.
Gold gains on soft inflation data and stable Fed policy
Gold prices climbed on Friday, setting up for a weekly increase as a softer US dollar and easing expectations for a September rate hike boosted demand for bullion. Spot gold advanced 0.5% to roughly $4,375 per ounce, recovering after profit-taking drove prices down from a two-month high during the previous session. US gold futures settled 0.25% higher by the end of the session.
This move followed economic data showing US inflation figures mostly met expectations, while July’s employment numbers came in weaker than anticipated. The data supported predictions that the Federal Reserve will keep interest rates unchanged within the 3.50% to 3.75% range at the next policy meeting.
CME FedWatch tool data showed market participants now attach a 33% probability to a rate hike in September, falling from levels seen the week before. The decline in the dollar added further support, making gold comparatively cheaper for international buyers.
Other precious metals also gained, with silver, platinum, and palladium all closing higher for the session.
Spot gold moved up 0.5% to about $4,375 per ounce on Friday as expectations of a Federal Reserve rate increase in September declined sharply and the weaker dollar boosted sentiment toward bullion.
Oil edges up on geopolitical risks and supply disruptions
Oil prices rose on Friday, building on weekly gains driven by concerns about disruptions in the Middle East and supply interruptions. Brent crude traded at $88.54 per barrel, while West Texas Intermediate crude stood near $82.34, with both benchmarks on pace to finish the week more than 4% higher.
Recent attacks on oil tankers operated by Abu Dhabi National Oil Company in the Strait of Hormuz heightened fears of prolonged supply disruptions through the vital shipping route. The United States’ renewed warnings about keeping the blockade of Iran in place further added to the cautious mood in oil markets.
The Sheskharis oil terminal at Novorossiysk, operated by Russia, suspended crude shipments following a reported drone incident, placing additional strain on global energy supplies. Despite these factors, some analysts pointed out that pessimistic demand forecasts from OPEC and increasing US crude inventories are holding back a sharper rally in prices.
| Asset | Current Price | Weekly Change |
|---|---|---|
| Gold (spot) | $4,375/oz | +0.5% |
| Brent crude | $88.54/barrel | +4% |
| WTI crude | $82.34/barrel | +4% |
| Bitcoin | $62,770 | -0.9% |
Oil prices notched weekly gains as escalating tensions in the Middle East and supply threats in the Strait of Hormuz overshadowed broader demand worries.
Bitcoin trades lower as stocks stay strong
Bitcoin lagged the broader financial markets on Friday despite US stocks hovering near record highs, buoyed by softer inflation numbers. The cryptocurrency traded at about $62,770, down 0.9% for the day and holding near its lowest level in August.
Market analysts observed that, unlike stocks, Bitcoin did not rally on easing inflation and declining prospects for further rate hikes from the Federal Reserve. Technical specialists warned that Bitcoin must reclaim the $63,220 level before the weekly close to reduce the risk of a further price drop.
Observers pointed out an increase in long positions and open interest across derivatives markets, highlighting that any further decline in price could spark enhanced volatility.
