The recent escalation of geopolitical tensions is indeed worth paying attention to. The temporary ceasefire agreement between the U.S. and Iran is set to expire soon, and market risk-aversion sentiment has clearly intensified. I think gold’s rally looks solid—after rebounding from its intraday lows by nearly $100, it has regained above $4,800. Honestly, for gold to rise in a situation like this is a very normal reaction.

Trump’s camp has said that if negotiations do not make breakthroughs, a large number of bombs will start exploding, but at the same time they also indicated they are willing to meet with Iranian leadership if there is progress. On the other side, Iran’s stance is also very firm. The Supreme Leader has reiterated three core positions, including war reparations. At present, it appears there is limited room for negotiations. Even more interestingly, it seems the Iranian Revolutionary Guard has already taken control of the situation, marginalizing moderates—meaning the next steps may become even tougher.

From an energy perspective, the situation in the Strait of Hormuz is definitely not optimistic. Citigroup warned that if the strait is disrupted again for one more month, oil prices could surge to $110, which would be a sizable impact on the global economy. At least 26 Iran-related ships have already broken through the U.S. military blockade, but the overall shipping situation remains very tense. WTI crude oil is currently holding steady above $85, but everyone knows this price may only be temporary.

The stock market reaction is also very clear. All three major U.S. indices fell across the board; the Nasdaq ended its 13-day winning streak, down 0.26%. European stocks also pulled back across the board: Germany’s DAX fell 1.15%, Intel dropped more than 4%, and tech stocks were generally under pressure. I also noticed that the UK’s March unemployment rate and U.S. retail data will be released today, along with the hearing for Waller, the Federal Reserve chair nominee—these could further influence market sentiment.

In the crypto market, Bitcoin is currently at 74.96K, down 1.25% over the past 24 hours. Ethereum is at 2.05K, down 0.72%. It looks like the whole market is digesting this risk-aversion sentiment. In the bond market, the U.S. 10-year benchmark Treasury yield is around 4.25%, up 1 basis point—this also reflects the market’s repricing of risk assets.

In short, this wave of rising geopolitical risk is driving gold up, causing commodity volatility, and prompting stock market adjustments. Ultimately, though, it still comes down to whether the U.S.-Iran negotiations can make concrete progress. In the short term, risk-aversion sentiment should likely continue, so you may want to keep a close watch on related assets.