The recent changes in the Middle East situation are indeed worth close attention, and this progress in the US-Iran talks this time could reshape the global commodity market landscape.

On May 7, major news emerged from Saudi media and Al Arabiya, stating that the US and Iran are nearing an agreement on gradually reopening the Strait of Hormuz. Earlier this week, Trump also emphasized multiple times that both sides are close to signing a one-page memorandum of understanding. The document contains 14 clauses covering key items such as Iran pausing uranium enrichment activities, the US lifting sanctions and unfreezing Iranian assets, and both parties removing restrictions on navigation through the Strait of Hormuz.

The instant the news was released, the market reaction was immediate and direct. International oil prices dropped sharply in the short term—WTI crude fell by more than 3% in a single day, probing the $93 support level. At the same time, gold surged by nearly $60, breaking through the 4,700 mark in one move, with a high of $4,753. The US Dollar Index also fell below the 98 level. Behind this ebb-and-flow pattern is the market’s optimistic expectations for easing geopolitical risks.

I noticed an interesting phenomenon: when the geopolitical situation improves at the margin, investors begin to reassess global economic growth and inflation expectations. According to an analysis by UN Secretary-General Guterres, if the Strait of Hormuz can resume navigation in the short term, the global economic growth rate would fall from 3.4% to 3.1%, while the inflation rate would rise from 3.8% to 4.4%. For emerging market currencies such as the South African rand, the long-term outlook will face continued pressure from inflation expectations, and over the next decade, exchange-rate fluctuations will depend more on changes in global liquidity and risk appetite.

The Swiss Ministry of Foreign Affairs has said it is prepared to host the relevant negotiations, with Geneva listed as a possible negotiation location. A senior strategist at BNY Mellon believes the market has already clearly priced in a cooling of the Middle East situation, and supply restrictions will gradually ease. Macquarie Group’s analysis also points out that the US has built greater economic leverage in its game with Iran by blocking the Strait of Hormuz and increasing domestic oil production.

From a technical perspective, the daily chart of gold shows it has continued rising after gaining strong support at $4,550, indicating that bullish sentiment in the market is indeed strengthening. Once gold effectively holds above $4,700, there is potential for it to further challenge the psychological $5,000 level, and even push toward $5,200. Morgan Stanley expects gold to rise to about $5,200 by the end of the year, which would leave roughly 10% upside potential compared with current levels.

The logic is actually quite clear: once geopolitical tensions truly ease, the market will start repricing rate-cut expectations again. With inflation expectations staying high, US real interest rates are likely to trend downward, which provides direct support for gold. Meanwhile, the 10-year US Treasury yield is also expected to fall further; after the dollar breaks through 98, it faces additional downside risk, which is an even stronger tailwind for dollar-denominated gold.

Of course, all of this depends on whether the US-Iran negotiations can achieve substantive progress. Although the core disagreements remain substantial, all sides have the motivation to push for the Strait of Hormuz to resume navigation. This could lead both sides to set aside key disputes first, reach a short-term agreement, and set a framework for subsequent negotiations. If this stalemate is still not resolved in the next few days, a breakthrough could still be possible in early Q2 or early Q3.