Oman’s Foreign Minister, Badr al-Busaidi, said US-Iran nuclear talks have made progress, Reuters reported. Negotiations will restart at technical level in Vienna next week, after an initial consultation phase. Before the Vienna technical meeting, each delegation will consult its own government. The goal is to review the practical details of a possible agreement.

Market Prices Snapshot

In markets, gold (XAU/USD) was down 0.14% at $5,189 at the time of writing. West Texas Intermediate (WTI) crude was down 0.84% at $64.90. In financial markets, “risk-on” and “risk-off” describe how willing investors are to take risk. Risk-on means buying riskier assets. Risk-off means moving into safer assets. In risk-on periods, shares often rise, many commodities may gain, some commodity-linked currencies can strengthen, and cryptocurrencies may rise. In risk-off periods, bonds can rise, gold can do well, and safe-haven currencies such as the US Dollar, Japanese Yen, and Swiss Franc may benefit. Currencies often linked to risk-on include the Australian Dollar, Canadian Dollar, New Zealand Dollar, Ruble, and South African Rand. Risk-off tends to support the US Dollar, Japanese Yen, and Swiss Franc.

Implications For Risk Sentiment

Reported progress in US-Iran talks signals easing geopolitical tensions. This usually supports a “risk-on” mood in markets. We are already seeing this, with gold and oil both falling on the news. This suggests traders are moving away from safe-haven assets and are pricing in the chance of more global oil supply. For oil derivatives, the near-term bias looks lower. If sanctions are lifted, Iran could add more than one million barrels per day to the market, which would put strong downward pressure on WTI and Brent. As a result, we should consider shorting oil futures or buying put options that expire in the coming months to benefit from the expected rise in supply. We saw a similar pattern in 2015, when the original nuclear deal was finalized. Oil prices weakened in the months before and after the agreement. Today, crude oil inventories have been rising slightly more than expected in recent weeks, which adds another bearish factor. This combination of history and current inventory trends supports the case for further downside in oil as talks progress. As geopolitical risk fades, gold becomes less attractive as a safe haven. The price has already fallen, and we expect the downtrend to continue as long as the diplomatic tone stays positive. We should look to sell gold futures or buy put options, as funds may move out of bullion and into assets that benefit from a stronger global outlook. A “risk-on” environment is usually negative for safe-haven currencies like the Japanese Yen (JPY) and Swiss Franc (CHF). These currencies may weaken against higher-yielding and commodity-linked currencies. One approach could be selling the yen against the Australian dollar, which often benefits when global growth sentiment improves. Commodity currencies like the Australian Dollar (AUD) and New Zealand Dollar (NZD) may find support in this environment. Lower oil prices could be a headwind for the Canadian Dollar (CAD), but better overall risk appetite should still be supportive. One way to position for this shift is buying call options on AUD/JPY. Create your live VT Markets account and start trading now.

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