Oil prices were set for a weekly jump while gold and Bitcoin surged on Friday amid Iran war uncertainty and a US push to double its bond buyback programme.
Prices of crude retreated on Friday, but were still on pace for a second straight weekly gain after the US threatened Iran with its “toughest sanctions” yet.
Brent, the benchmark for two thirds of the world's oil, was up 0.25 per cent at $94.01 a barrel at 3.30pm UAE time. West Texas Intermediate, the gauge that tracks US crude, added 0.37 per cent to $87.15 per barrel. Prices had surged by 3 per cent on Thursday after the US announced measures to tighten the economic pressure on Iran.
From last week's closing, Brent is so far up nearly 5.5 per cent, poised to end the week above $90 for the first time in a month. WTI has added almost 5 per cent over the same period.
US Treasury Secretary Scott Bessent on Thursday said Washington would impose even more punitive economic sanctions on Tehran to break the impasse in negotiations.
The two sides reached an initial two-month ceasefire agreement in June to prepare the ground to end the conflict. The agreement, however, unravelled and the US has changed tactics to increase the pressure on Iran's already wobbling economy.
Mr Bessent said he was planning to hold a news conference on Monday “to talk about exactly what we're going to do”.
Separately, US President Donald Trump has warned of “tremendous economic consequences” for countries doing business with Iran.
The US moves have “increased the probability that Iranian barrels, shipping routes and counterparties face tighter restrictions”, said Naeem Aslam, chief information officer of London-based Zaye Capital Markets.
Iran's central bank governor, Abdolnaser Hemmati, this week said the country was not exporting any oil. Iran is also battling runaway inflation and a plunging currency.
The Tehran regime has weathered sanctions for decades, going back to Jimmy Carter's US administration, which began an economic pressure campaign in response to the seizure of the American embassy in Tehran in 1979.
More than 6,000 sanctions are in place across Iran's financial, banking, aviation, energy and cryptocurrency sectors. It is one of the most heavily sanctioned countries in the world.
The escalating uncertainty and rhetoric is increasing concerns around the crude market, especially as “oil flows through the Strait of Hormuz remain disrupted, while Middle Eastern supply and refined-product availability are already constrained”, Mr Aslam added.
Gold and Bitcoin surge
Gold also added to its gains and is poised for a third consecutive weekly increase as the dollar hit a multi-month low after the US announced it would increase its bond buyback programme.
The precious metal, considered a safe haven against inflation, was up 1.87 per cent to $4,597.83 per ounce, putting it on pace for a weekly gain of about 5 per cent.
The US Treasury on Wednesday said it would double the size of its repurchases of long-dated securities to at least $4 billion per round over the next quarter.
Mr Bessent followed that up by saying Washington might even further boost its Treasury buybacks.
Gold has also benefitted from softer monetary policy expectations over the short term, with markets betting that the US Federal Reserve will maintain interest rates at its next meeting in September.
“While bond yields stabilised after the markets’ reaction to the US Treasury’s decision to increase the size of long-dated bond buybacks, attention could remain on upcoming operations that could weigh on yields, creating an opportunity for gold to recover,” said Bas Kooijman, chief executive and asset manager of Luxembourg-based DHF Capital.
The bond buyback plans have also benefitted Bitcoin, which added to its gains that began on Wednesday with the US Treasury's announcement.
The world's biggest and original cryptocurrency jumped about 8 per cent to $77,433.36, and by nearly 24 per cent for the week, according to data from CoinMarketCap.
“Lower Treasury yields and a weaker dollar would remain supportive because they reduce the relative attraction of cash and fixed-income assets, while a renewed rise in long-term yields could pressure Bitcoin and other high-beta assets,” Mr Aslam said.
