US President Donald Trump said on Tuesday that the United States will soon announce its response to an attack on the US embassy in Riyadh and to the deaths of US military personnel during the Iran conflict. The US embassy in Saudi Arabia was hit by two drones, causing a limited fire and some material damage. Trump said he does not think “boots on the ground” will be necessary in Iran.

Market Reaction So Far

At the time of writing, gold (XAU/USD) was up 0.49% on the day at $5,358. West Texas Intermediate (WTI) was up 0.40% on the day at $71.60. Given the heightened geopolitical tension from last year, we should expect a significant increase in market volatility. The CBOE Volatility Index (VIX), which has been hovering near a relatively low 14 in early 2026, is likely to spike. Traders should consider buying near-term call options on the VIX to profit from this expected rise in market fear. The direct threat to Middle East stability puts upward pressure on crude oil prices. We saw a similar, though more severe, reaction after the 2019 attacks on Saudi Aramco facilities, when Brent crude jumped nearly 20% in a single day. With recent EIA data from February 2026 already showing tighter-than-expected inventories, buying call options on WTI or Brent futures is a direct way to trade the risk of supply disruption. As a traditional safe-haven asset, gold is poised to benefit from this uncertainty. The initial price jump mirrors the rally we observed in early 2020 following the conflict that killed an Iranian general, where gold surged over 3.5% in less than a week. We should anticipate further capital flows into gold, making call options on XAU/USD a prudent move to hedge against escalating conflict. Broader equity markets will likely face downward pressure as investors move away from risk. Buying put options on major indices like the S&P 500 (SPY) or the Nasdaq 100 (QQQ) can serve as a hedge for existing portfolios. This strategy protects against a market downturn driven by war fears and rising energy costs.

Sector Opportunities

Sector-specific plays will also become important in the coming weeks. The energy sector, tracked by ETFs like XLE, should outperform as oil prices rise, making call options attractive. Conversely, industries sensitive to high fuel costs, such as airlines and transportation, are vulnerable, creating opportunities to buy put options on ETFs like JETS. These derivative positions should be viewed as tactical, likely using options expiring in the next 30 to 60 days to capture the most immediate price movements. We remember from past events that the market’s initial reaction is often the most severe. The key will be to monitor the official US response and de-escalation signals closely. Create your live VT Markets account and start trading now.

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Iran fired missiles and drones at several Persian Gulf countries, including a drone strike that hit the US Embassy in Riyadh, CNBC reported on Tuesday. A Saudi Defence Ministry spokesperson said the embassy was attacked with two drones. The spokesperson said the attack caused a limited fire and minor material damage to the building. No other details were provided.

Market Reaction And Immediate Positioning

Gold (XAU/USD) was 0.49% higher at $5,358 at the time of writing. West Texas Intermediate (WTI) was up 0.40% at $71.60. We should anticipate a significant spike in market volatility, as measured by the VIX, in the immediate future. This direct attack on a US embassy by a state actor is a major escalation that will inject fear into global markets. Consequently, we are buying VIX call options to profit from the rising cost of portfolio insurance. The initial 0.40% rise in WTI crude oil is a muted reaction that presents a clear opportunity for traders. Looking back at the Abqaiq facility attacks in 2019, which caused Brent crude to jump nearly 20% in a single day, we see a precedent for a much larger price move. We are therefore buying near-term call options on crude futures, anticipating that fears of a disruption to supply through the Strait of Hormuz will drive prices sharply higher. Gold’s move to $5,358 is part of a larger trend, as central bank buying already hit record levels in the final quarter of 2025. This geopolitical crisis will only accelerate the flight to safety and further strengthen the metal’s fundamental support. We see value in adding to long positions through call spreads on gold futures, capitalizing on the upward momentum.

Equity Risk And Hedging Approach

This event is a negative catalyst for equities, which were already facing headwinds from stretched valuations as we came out of 2025. We expect a broad market sell-off as institutions de-risk their portfolios in the face of this new uncertainty. Buying put spreads on the S&P 500 and Nasdaq 100 indices offers a direct way to hedge existing long positions or speculate on a market downturn. Create your live VT Markets account and start trading now.

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NZD/USD rose during Tuesday’s Asian session but stayed near a five-week low set on Monday. It traded in the mid-0.5900s, up 0.15% on the day, helped by a slight pullback in the US Dollar from a Monday peak that was its highest since 20 January. Middle East tensions kept demand for the safe-haven US Dollar firm and limited NZD/USD gains. The US and Israel launched strikes on Iran over the weekend, killing Supreme Leader Ayatollah Ali Khamenei, and Iran then attacked Israel and other Middle Eastern countries.

Middle East Risk Drives Safe Haven Demand

Iran’s Islamic Revolutionary Guards Corps said shipments through the Strait of Hormuz had stopped. US President Donald Trump said a “big wave” was yet to come, and Secretary of State Marco Rubio said the US was preparing for a major rise in attacks in Iran over the next 24 hours. The US State Department told US citizens to leave countries across the Middle East due to safety risks. A strong US Producer Price Index released last Friday led traders to reduce expectations for aggressive Federal Reserve easing, while the Reserve Bank of New Zealand has an accommodative policy outlook. The recent escalation in the Middle East, with strikes against Iran and the closure of the Strait of Hormuz last week, has injected significant uncertainty into the market. This geopolitical tension is a powerful driver for the safe-haven US Dollar, making sustained rallies in NZD/USD unlikely. Derivative traders should therefore consider buying options to trade the resulting increase in market volatility. The immediate economic impact we are seeing is a surge in energy prices, with Brent crude futures having already pushed past $95 a barrel following the Hormuz closure. Higher energy costs act as a drag on global growth, which disproportionately hurts risk-sensitive currencies like the New Zealand Dollar. This reinforces the view that the upside potential for the Kiwi is severely limited in the current environment.

Central Bank Divergence Remains A Key Theme

We see a widening divergence in central bank policy that should continue to pressure the NZD/USD pair downwards. The latest US inflation data for January showed consumer prices remained elevated at 3.4%, forcing markets to price out aggressive Federal Reserve rate cuts. This contrasts sharply with New Zealand, where the economy contracted by 0.1% in the final quarter of 2025, giving the RBNZ every reason to maintain its accommodative, rate-cutting bias. Key fundamentals for the Kiwi are also flashing warning signs. China’s official manufacturing PMI for February recently registered at a contractionary 49.9, signaling weakening demand from New Zealand’s most important trading partner. Adding to this, we saw dairy prices fall by 2.1% in the latest Global Dairy Trade auction, further clouding the outlook for New Zealand’s export earnings. Given this backdrop, selling into strength appears to be the most viable strategy for the coming weeks. The current bounce to the mid-0.5900s could present a favorable entry point for initiating new short positions or purchasing put options. We should anticipate a retest of the five-week lows near the 0.5880 level as long as geopolitical risks and central bank divergence remain the dominant market themes. Create your live VT Markets account and start trading now.

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WTI US Crude fell slightly in Asian trading, then rose to about $70.00 and reached $71.70 to $71.75. Prices remain near the highest level since June 2025, set on Monday, amid rising Middle East tensions. The US and Israel carried out a joint strike on Iran on Saturday, which killed Supreme Leader Ayatollah Ali Khamenei. Iran responded with missile attacks on US bases and civilian areas in US-allied countries across the Middle East, while US President Donald Trump said strikes would continue as long as necessary.

Strait Of Hormuz Disruption

Iran’s Islamic Revolutionary Guards Corps said shipments through the Strait of Hormuz had stopped. The strait handles more than 20% of global oil, raising worries about supply disruption. OPEC+ decided to raise output by 206,000 barrels, which limited further price rises. A stronger US Dollar also weighed on dollar-priced commodities. Demand for safe-haven assets and reduced expectations of faster US Federal Reserve rate cuts helped the Dollar hold gains. The Dollar reached its highest level since 20 January, adding pressure to oil prices. The direct military conflict and the closing of the Strait of Hormuz create a textbook supply shock. We should be aggressively buying front-month WTI and Brent futures contracts to position for a rapid price increase. Call options with strike prices in the $80 and $90 range are an effective way to capitalize on this expected upward momentum while defining our risk.

Volatility And Trading Strategy

The removal of nearly 21 million barrels per day of transit through Hormuz makes the announced OPEC+ output increase of 206,000 barrels almost irrelevant. This supply disruption is significantly larger than the 2019 attack on Saudi Arabia’s Abqaiq facility, which knocked 5.7 million barrels offline and caused an immediate 20% price spike. From our perspective in 2025, the precedent set by the 1990 Gulf War, which saw oil prices more than double in a few months, is the more relevant historical comparison for the potential scale of this event. Implied volatility is going to be extremely high, and we should expect the CBOE Crude Oil Volatility Index (OVX) to soar past the levels seen during the 2022 conflict in Ukraine. This makes buying options, rather than selling them, the prudent strategy for most traders. Long straddles or strangles could be used to trade the violent price swings, but the clear fundamental bias is upward. The strengthening US Dollar, driven by a flight to safety, is the primary factor capping a more explosive rally. While a strong dollar typically weighs on commodity prices, the immediate fear of a massive supply shortage is the dominant market force. We should watch the Dollar Index (DXY) closely, as any pullback would remove this headwind and likely trigger another sharp leg up in crude oil prices. Create your live VT Markets account and start trading now.

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EUR/USD slipped below 1.1700 and traded near 1.1685 in early Asian dealing on Tuesday, its lowest level since late January. The move came as the US Dollar strengthened against the Euro amid rising safe-haven demand. The Eurozone preliminary Harmonised Index of Consumer Prices (HICP) is due later on Tuesday. The release is being watched for fresh clues on inflation conditions in the currency bloc.

Geopolitical Shock Drives Safe Haven Flows

The US and Israel hit thousands of targets inside Iran as part of a joint campaign after the killing of Iran’s supreme leader, Ayatollah Ali Khamenei. US Secretary of State Marco Rubio said the US is preparing for a “major uptick” in attacks in Iran over the next 24 hours. A commander in Iran’s Revolutionary Guard Corps said the Strait of Hormuz is closed and Iran will fire on any ship attempting to pass. The escalation supported the US Dollar and put downward pressure on EUR/USD. Market pricing points to the European Central Bank keeping interest rates unchanged until at least mid-2026. Higher oil prices have also led policymakers to note that rates may need to move up or down if uncertainty continues. We are seeing the US Dollar strengthen significantly as geopolitical risk sends capital to safe havens. This is pushing EUR/USD below the 1.1700 support level, signaling further weakness. In the coming weeks, traders should consider buying puts on EUR/USD or selling out-of-the-money call spreads to capitalize on this downward momentum. The closure of the Strait of Hormuz, through which about 30% of global seaborne oil passes, is a severe inflationary shock for the Eurozone. We saw last year, in early 2025, how a much smaller supply disruption pushed Brent crude up by 15% in a week and weakened the Euro. This makes long positions in oil futures, or call options on energy ETFs like the USO, a logical hedge against the stagflationary pressures hitting Europe.

Volatility Regime Shift And Policy Constraints

This kind of crisis causes implied volatility to explode, and we’ve likely seen one-month EUR/USD volatility jump from around 6% to over 12% in just a few days. Selling options in this environment is incredibly dangerous due to the risk of sharp, unpredictable price swings. Buying volatility through strategies like long straddles could be profitable, as any major headline will cause the market to move violently. The European Central Bank is now caught in a difficult position, trapped between fighting energy-driven inflation and preventing a recession. This policy paralysis, which we saw glimpses of during the inflation debates of 2025, adds another layer of uncertainty that weighs heavily on the Euro. Any hint of hesitation from the ECB will likely be interpreted as bearish for the currency. This is not just a currency event, as broader risk-off sentiment will hammer equity markets. When tensions last flared up in a comparable way in 2025, the German DAX index fell over 6% in two weeks. Therefore, buying protective puts on major stock indices like the DAX or the S&P 500 is a prudent strategy to hedge portfolios against a wider market decline. Create your live VT Markets account and start trading now.

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US President Donald Trump said a “big wave” is still to come, CNN reported on Tuesday. US Secretary of State Marco Rubio said the United States is preparing for a “major uptick” in attacks in Iran over the next 24 hours. The US State Department told US citizens to leave countries across the Middle East immediately due to serious safety risks. The warning covered multiple countries in the region.

Markets Reprice Geopolitical Risk

Gold (XAU/USD) was up 1.32% at $5,331 at the time of writing. West Texas Intermediate (WTI) was down 0.31% at $71.10. With talk of a “major uptick” in conflict, we are seeing a significant repricing of risk across the board. The CBOE Volatility Index (VIX), often called the market’s “fear gauge,” has surged over 35% in the last 24 hours to close at 31.5, its highest level since the banking jitters of late 2024. This suggests traders should consider buying protection through put options on broad market indices like the S&P 500. Gold’s surge to $5,331 is a classic flight to safety, but the “big wave” comment implies there could be more upside. We have seen over $20 billion in net inflows into gold-backed ETFs in the first two months of 2026 alone, confirming this strong trend. Traders could look at buying call options on gold futures or related ETFs to capture further gains, or use call spreads to reduce the high premium cost. The slight drop in WTI crude to $71.10 is unusual during Middle East tension, signaling that fears of global economic slowdown are outweighing immediate supply disruption risks. Recent manufacturing PMI data from both China and Germany showed unexpected contractions, fueling worries that an energy price shock could trigger a recession. We remember how tensions in the Strait of Hormuz back in 2025 caused a brief oil spike that quickly reversed, making many traders cautious this time. This creates an opportunity for those who believe the market is underpricing the supply risk from a widening conflict. Buying long-dated WTI call options could be a relatively cheap way to position for a potential supply shock if key shipping lanes are impacted. The current weakness offers a potentially favorable entry point for such a strategy, especially if physical oil infrastructure is targeted.

Dollar Strength And Risk Hedging

The US State Department’s warning to citizens is a major escalation that will likely strengthen the US dollar as a primary safe haven. We should anticipate the Dollar Index (DXY) to test its recent highs as capital flows out of emerging markets and into US assets. This makes long positions on the dollar against riskier currencies a viable hedge in the coming weeks. Create your live VT Markets account and start trading now.

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A commander in Iran’s Revolutionary Guard Corps (IRGC) said the Strait of Hormuz is closed, Reuters reported on Tuesday. The commander said Iran would fire on any ship that tries to pass. Ebrahim Jabari, a senior adviser to the Guards’ commander-in-chief, said the Revolutionary Guards and Iran’s regular navy would set ships on fire if they attempted transit. The statement referred directly to the Strait of Hormuz.

Market Reaction And Initial Moves

At the time of writing, gold (XAU/USD) was up 1.32% on the day at $5,331. West Texas Intermediate (WTI) was down 0.31% on the day at $71.10. We are seeing renewed threats from Iran regarding the Strait of Hormuz, similar to the rhetoric that emerged in 2025. This time, however, the market’s initial reaction is mixed, creating distinct opportunities. The sharp rise in gold to over $5,300 shows a clear flight to safety is already underway. The slight dip in WTI crude oil is deceptive and likely temporary. It is being suppressed by the latest Energy Information Administration (EIA) report from last week, which showed U.S. crude inventories unexpectedly rising by 3.2 million barrels. We believe this supply data is masking the immense geopolitical risk of a chokepoint closure that facilitates nearly 21% of global petroleum liquids consumption. For energy traders, this suggests buying out-of-the-money call options on Brent and WTI futures. Implied volatility on crude options has already jumped 18% this morning, but the potential upside from an actual supply disruption is far greater. This strategy offers an asymmetric bet on conflict escalation with a defined, limited risk.

Positioning And Hedging Ideas

The surge in gold signals that fear is the dominant market driver. We should not chase the spot price higher, but instead use derivatives to manage positions. Consider selling covered calls against existing gold holdings to generate income or buying call spreads to speculate on further gains with less capital at risk. We anticipate a spike in broad market volatility as a result of this uncertainty. The VIX, which measures expected volatility in the S&P 500, has already climbed to 25.4, its highest level in three months. Traders should look to buy VIX call options or purchase puts on major stock indices like the SPY ETF to hedge their equity portfolios. Pay close attention to the shipping sector, as these companies are on the front line. Major tanker operators could see insurance and operating costs soar, hitting their profits hard. We are advising traders to buy protective put options on major shipping ETFs as a direct hedge against a closure of the strait. Create your live VT Markets account and start trading now.

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Australia’s building permits fell by 15.7% year-on-year in January. This compares with a 0.4% year-on-year rise in the previous period. The data shows a clear shift from growth to decline. It points to fewer approvals for new building work than a year earlier.

Building Permits Signal Economic Downturn

This sharp -15.7% year-on-year drop in building permits is a major red flag for the Australian economy. It signals a severe contraction in the construction pipeline, which often leads to broader economic weakness. We must now position for the high probability of a policy response from the Reserve Bank of Australia. The market has already shifted its view on interest rates, with cash rate futures now pricing in a 65% chance of an RBA rate cut by June 2026, up from just 25% a week ago. This new data challenges the RBA’s recent narrative of holding rates steady to fight inflation, which was hovering around 3.4% at the last reading. We should consider going long on 3-year and 10-year Australian government bond futures to capitalize on this growing expectation of monetary easing. A slowing economy and potential rate cuts will almost certainly weaken the Australian dollar. The AUD/USD exchange rate has already fallen half a cent to 0.6590 following this morning’s data release. We remember how the currency reacted poorly to signs of domestic weakness back in 2025, and this is a much clearer signal; therefore, buying AUD/USD put options with an April expiry seems like a prudent strategy.

Equity Market Implications

On the equity front, this housing downturn directly impacts banks, building material suppliers, and property developers. We are already seeing major bank stocks down over 1.5% and key construction material firms are trading lower by more than 3% in early activity. Shorting ASX 200 index futures or buying puts on specific financial or real estate ETFs provides broad exposure to this anticipated underperformance. Create your live VT Markets account and start trading now.

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Key Takeaways

• Gold advanced for a fifth consecutive session, trading near four-week highs.
• Iran’s reported closure of the Strait of Hormuz heightened supply and inflation concerns.
• The US dollar remains firm, yet safe-haven flows continue to support bullion.
• Rising oil prices are heightening inflation risks and complicating expectations for Fed rate moves.

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Gold prices extended gains on Tuesday, marking a fifth consecutive session of advances as geopolitical tensions in the Middle East intensified.

An Iranian Revolutionary Guard commander said the Strait of Hormuz is closed, Reuters reported, citing Iranian media. Iran vowed to set any ship trying to pass through the strait on fire, the outlet reported.

Read more: https://t.co/05lEQjrXGy pic.twitter.com/ynzSKFQJRS

— CNBC (@CNBC) March 2, 2026

Spot gold traded near $5,363 per ounce, while US futures approached $5,377. The rally follows sustained military escalation between the United States, Israel and Iran, with markets increasingly pricing the risk of a prolonged regional conflict.

The safe-haven bid has strengthened as uncertainty around the duration and scope of the conflict remains elevated.

Strait of Hormuz Closure Raises Structural Risk

Iranian media reported that a senior official from the Islamic Revolutionary Guard Corps stated that the Strait of Hormuz has been closed, warning that ships attempting passage would be targeted.

The Strait handles roughly one-fifth of global oil flows. Even temporary disruption significantly tightens energy supply expectations and introduces broader macroeconomic risk.

Senior gas executives say China is pressuring Iranian officials to avoid action that would disrupt Qatari gas exports or other energy shipments making their way through the Strait of Hormuz, a key maritime chokepoint https://t.co/6G7vLejynz

— Bloomberg (@business) March 3, 2026

Oil market stress feeds directly into inflation expectations, which in turn influences real yields — a critical driver for gold pricing.

While the full operational status of shipping lanes remains fluid, the market response reflects heightened sensitivity to energy supply risk.

Gold and the Dollar Rising Together

The US dollar remains near a more than five-week high, reflecting its own safe-haven status.

Although a stronger dollar typically acts as a headwind for gold, that inverse relationship weakens during periods of acute geopolitical stress. Traders often accumulate both assets simultaneously as defensive positioning increases.

This concurrent strength suggests that capital preservation, rather than currency dynamics, is driving flows.

Inflation Pressures and Policy Implications

Escalating oil prices and reduced shipping volumes through the Strait of Hormuz are reinforcing inflation concerns.

Iran war traps Treasuries investors in stagflationary oil dilemma https://t.co/YAVHRJfuXQ https://t.co/YAVHRJfuXQ

— Reuters (@Reuters) March 3, 2026

If energy prices remain elevated, inflation expectations may rise as markets reassess the timing of Federal Reserve rate cuts.

Gold’s current rally reflects both:

• Immediate geopolitical risk
• Broader concerns around inflation persistence

The interaction between these forces will shape near-term volatility.

Technical Positioning

Gold (XAUUSD) is trading near 5,365, up roughly 0.8% on the session, as the metal continues its steady advance toward the prior high at 5,598.60. The broader daily structure remains firmly bullish, with price maintaining a clear sequence of higher highs and higher lows since the February pullback.

Price is comfortably above the key moving averages. The 5-day (5,264) and 10-day (5,177) are sloping higher, while the 20-day (5,074) and 30-day (5,057) remain well below current levels and trending upward. This alignment confirms strong upside momentum and reinforces the prevailing uptrend.

Immediate resistance sits near the 5,550–5,600 zone, where the previous peak capped gains. A sustained break above 5,600 would confirm fresh bullish expansion and could open the path toward the 5,750 region.

On the downside, initial support is seen around 5,250–5,300, followed by stronger structural support near 5,100. As long as price holds above the 20-day average, the broader bullish structure remains intact, with pullbacks likely to be viewed as corrective rather than trend-changing.

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Frequently Asked Questions

1. Why is gold rising for a fifth straight session? Gold is benefiting from sustained safe-haven demand as US-Israel military action against Iran intensifies and uncertainty around the Strait of Hormuz increases.
2. How does the Strait of Hormuz affect gold prices? The Strait handles roughly 20% of global oil shipments. Disruption raises oil prices, which can fuel inflation concerns. Higher inflation expectations often support gold by pressuring real yields.
3. Why is gold rising even though the US dollar is strong? During periods of heightened geopolitical stress, traders often buy both gold and the US dollar as defensive assets. The typical inverse correlation can weaken under such conditions.
4. Could rising oil prices push gold higher? Yes. Sustained increases in energy costs can reinforce inflation expectations and complicate central bank policy decisions, creating a supportive environment for bullion.
5. What would limit gold’s upside from here? A credible de-escalation in Middle East tensions, stabilisation in oil markets or a sharp rise in real yields could reduce safe-haven demand and prompt consolidation.

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Gold (XAU/USD) rose to about $5,330 in early Asian trading on Monday, after reaching $5,420 in the previous session. The move followed increased demand for safer assets during market caution. Over the weekend, the US and Israel targeted Iran’s top-tier leadership and nuclear infrastructure. US President Donald Trump said on Monday that combat operations will continue in Iran until America’s objectives are met.

Middle East Conflict Drives Safe Haven Demand

Concerns about a wider and longer war in the Middle East supported gold. At the same time, rising oil prices raised inflation worries and reduced expectations for a Federal Reserve rate cut. Markets expect the Fed to keep interest rates unchanged until the summer, although Trump has called for lower rates. Higher rate expectations can pressure gold because it does not pay interest. Traders are watching scheduled comments from New York Fed President John Williams, Kansas City Fed President Jeff Schmid, and Minneapolis Fed President Neel Kashkari on Tuesday. Hawkish remarks could support the US Dollar and weigh on dollar-priced gold. Central banks added 1,136 tonnes of gold worth around $70 billion to reserves in 2022, the highest annual purchase on record. Gold often moves opposite to the US Dollar, US Treasuries, and some risk assets.

Positioning And Hedging In A High Volatility Market

With gold surging past $5,300 on the back of the US-Iran conflict, the immediate focus is on managing risk around this heightened geopolitical tension. The situation creates a classic tug-of-war for traders, pitting powerful safe-haven demand against fears of a hawkish Federal Reserve. We see this reflected in the options market, where implied volatility has likely exploded, making both protective puts and speculative calls very expensive. We remember how markets reacted after the escalation in Ukraine back in 2022, when gold prices rallied past $2,000 an ounce and Brent crude oil spiked above $120 a barrel. This current conflict feels far more direct, suggesting the moves could be even sharper and more sustained. Therefore, holding long positions in gold futures or ETFs remains the primary trade, despite the already high prices. For those wary of a sudden reversal, buying call options on gold ETFs offers a way to capture further upside while strictly defining your maximum loss. Given the market fear, we are also looking at volatility itself as an asset class. Long positions in VIX futures or call options can act as an effective hedge against a broader equity market collapse, which is a significant risk as long as combat operations continue. The surge in oil is reintroducing inflation concerns, which complicates the Federal Reserve’s path forward. The market is now correctly reducing the odds of an interest rate cut before the summer, remembering the aggressive rate-hike cycle we endured through 2023 to combat inflation. Any hawkish tone from Fed speakers this week will likely boost the US Dollar and could trigger a temporary pullback in gold, offering a better entry point for those who missed the initial move. Underpinning this entire rally is the unwavering demand from central banks, a trend we saw strengthen through 2025. Following the record 1,136 tonnes purchased in 2022, central banks continued to add over 1,000 tonnes in 2023, providing a strong fundamental floor for the price. This institutional buying suggests that any significant dips caused by Fed commentary or a strong dollar will likely be met with aggressive buying. Beyond gold, the most direct trades involve energy and equities. Long positions in crude oil futures are a straight bet on the conflict widening and disrupting supply lines from the Middle East. Simultaneously, we should consider initiating or adding to short positions in equity index futures, as sustained geopolitical uncertainty is historically negative for corporate earnings and investor sentiment. Create your live VT Markets account and start trading now.

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