Oil prices jumped and gold fell more than 1% on Wednesday after US President Donald Trump declared that an interim peace deal with Iran was "over." The abrupt shift in diplomatic posture reversed the market consensus that had been pricing in a de-escalation of tensions in the region.
The cross-asset reaction was immediate.
Energy markets repriced the risk of supply disruption, sending crude higher as traders unwound bets on a stable supply environment.
Conversely, gold, which had benefited from the prospect of reduced geopolitical risk, faced selling pressure as inflation fears and the potential for higher interest rates returned to the forefront of investor concerns.
This development marks a sharp reversal from earlier in the week.
On Monday, oil prices had fallen sharply as traders rapidly discounted the prospect of conflict, following reports that President Trump was preparing to announce a formal agreement.