Brent crude and gold prices staged a sharp recovery on Monday, reversing the steep losses seen earlier in the week as fears of a prolonged closure of the Strait of Hormuz returned to the forefront of market sentiment.
The rebound came after crude oil prices had fallen nearly 6% on Wednesday, driven by reports that Iran was preparing to restore traffic through the strategic waterway as part of a potential agreement with the United States.
However, that optimism has since evaporated, with traders now pricing in the continued risk of a blockade.
The Strait of Hormuz remains a critical chokepoint for global energy flows, handling a significant portion of the world's oil and liquefied natural gas exports.
Any disruption to transit through the strait poses an immediate threat to supply chains and has the potential to trigger sharp volatility in energy markets.
The reversal in sentiment highlights the fragile nature of the current geopolitical standoff.