The Donald Trump Administration-brokered ceasefire deal between Israel and Iran has pushed down oil and gold prices in early Asian trading hours. Gold fell to a near two-week low today (Tuesday), to about $3,340, while the two oil benchmarks also dropped by more than 5 per cent each.
Markets Reaction: Gold and Oil Drop
Brent crude futures were down 5.3 per cent to $67.66 a barrel as of press time, while US West Texas Intermediate crude fell 5.5 per cent to $64.76 per barrel. Gold, meanwhile, dropped by over 1 per cent.
However, the US dollar—traditionally considered a safe-haven currency—has weakened significantly.
“Intra-day volatility in the oil price—Brent crude is down and has traded in a wide range between $66 and $73 per barrel,” said Kathleen Brooks, Research Director at XTB. “The gold price has dropped $45 per ounce, and the dollar, which was the safe haven of choice in recent days, is now the weakest currency in the G10 FX space.”
“Trump has flipped a switch, and the market is responding, although risk sentiment is sensitive to headline risk.”
Analyst forecasts on gold prices linked to the current Israel-Iran crisis:
| Institution / Analyst (note date) | Headline prediction | Time-frame stated |
|---|---|---|
| Bank of America (22 Jun 2025) | US $4 000 / oz target | “within the next 12 months” |
| Goldman Sachs(14 Apr 2025 note, reiterated 23 Jun 2025) | US $3 700 / oz base-case by end-2025;up to US $3 880 / oz if recession hits | End-2025 (base); “earlier” if risk-off flows spike |
| J.P. Morgan(22 Apr 2025) | Avg US $3 675 / oz in Q4 2025, on path to US $4 000 / oz by mid-2026 | Q4 2025 (avg) |
| MKS PAMP (Metal Focus) – analyst Philip Christian(23 Jun 2025) | US $3 500 / oz “in the next couple of months” | 2-to-3-month view |
Read more: JPMorgan Predicts Bitcoin to Outperform Gold in H2 2025 Driven by Institutional Adoption
A Ceasefire in the Region
Iran ranks seventh in global oil production. However, its geography allows it to control the Strait of Hormuz, a vital global shipping channel. The narrow strip of water between Iran and Oman handles between 20 and 30 per cent of global oil and gas supplies.
After Israel’s first strike on Iran over a week ago, oil prices quickly jumped by 8 per cent due to fears of a blockade in the Strait of Hormuz. However, Iran did not block the channel—even after the US targeted three of its nuclear sites with so-called bunker buster bombs.
Interestingly, oil prices dropped even after Iran retaliated by striking the US air base in Qatar. That reactionary strike lowered the likelihood of Iran imposing a blockade on the Strait of Hormuz.
Prices fell further after US President Trump first announced the ceasefire on his Truth Social account.
Related: Tariffs and Iran Oil Crisis Complicate FX Hedging – Overlays Cut Risk, Raise Costs
“The rapid oil price decline earlier today was a sign that the market is taking this agreement as a done deal,” Brooks added. “Brent crude had rallied nearly 20% in the past month as a war premium was attached to the price of oil, which is now being unwound. However, if there are more signs that the ceasefire is not holding, we could see the oil price resume its uptrend.”
Analyst forecasts on oil prices linked to the current Israel-Iran crisis:
| Institution / Analyst (note date) | Base-case view | Stress / worst-case linked to conflict | Time-frame stated |
|---|---|---|---|
| Goldman Sachs(23 Jun 2025) | US $95 / bbl average in Q4 2025 | US $110 / bbl if the Strait of Hormuz is half-blocked for a month | Q4 2025 (base); immediate spike in a blockade |
| J.P. Morgan(23 Jun 2025) | Low-to-mid $60s / bbl through H2 2025 | US $120-130 / bbl (≈ +75 %) if conflict widens or Hormuz closed | Remainder 2025 (base); scenario view |
| Citigroup(19 Jun 2025) | US $75-78 / bbl if 1.1 m bpd Iranian exports lost | ≈ US $90 / bbl if 3 m bpd disrupted for months; higher if Hormuz shut | Multi-month outlook |
| Rystad Energy(17-20 Jun 2025) | Expects prices “capped below $80” while flows continue | > US $100 / bbl if Hormuz closure becomes reality | Near-term (weeks) |
Despite the broader concerns surrounding the Middle East conflict, key market indicators remained stable. The VIX—used to measure market volatility—did not surge meaningfully during the conflict. Stock markets also showed limited reaction.
“The most affected was the Eurostoxx index, which fell more than 2% in the past week. However, US stocks have posted gains,” Brooks continued. “The market had a far stronger reaction to US trade tariffs than to geopolitical risk, which highlights that economic concerns are more worrying for stock markets than geopolitical issues, at this stage.”
The Donald Trump Administration-brokered ceasefire deal between Israel and Iran has pushed down oil and gold prices in early Asian trading hours. Gold fell to a near two-week low today (Tuesday), to about $3,340, while the two oil benchmarks also dropped by more than 5 per cent each.
Markets Reaction: Gold and Oil Drop
Brent crude futures were down 5.3 per cent to $67.66 a barrel as of press time, while US West Texas Intermediate crude fell 5.5 per cent to $64.76 per barrel. Gold, meanwhile, dropped by over 1 per cent.
However, the US dollar—traditionally considered a safe-haven currency—has weakened significantly.
“Intra-day volatility in the oil price—Brent crude is down and has traded in a wide range between $66 and $73 per barrel,” said Kathleen Brooks, Research Director at XTB. “The gold price has dropped $45 per ounce, and the dollar, which was the safe haven of choice in recent days, is now the weakest currency in the G10 FX space.”
“Trump has flipped a switch, and the market is responding, although risk sentiment is sensitive to headline risk.”
Analyst forecasts on gold prices linked to the current Israel-Iran crisis:
| Institution / Analyst (note date) | Headline prediction | Time-frame stated |
|---|---|---|
| Bank of America (22 Jun 2025) | US $4 000 / oz target | “within the next 12 months” |
| Goldman Sachs(14 Apr 2025 note, reiterated 23 Jun 2025) | US $3 700 / oz base-case by end-2025;up to US $3 880 / oz if recession hits | End-2025 (base); “earlier” if risk-off flows spike |
| J.P. Morgan(22 Apr 2025) | Avg US $3 675 / oz in Q4 2025, on path to US $4 000 / oz by mid-2026 | Q4 2025 (avg) |
| MKS PAMP (Metal Focus) – analyst Philip Christian(23 Jun 2025) | US $3 500 / oz “in the next couple of months” | 2-to-3-month view |
Read more: JPMorgan Predicts Bitcoin to Outperform Gold in H2 2025 Driven by Institutional Adoption
A Ceasefire in the Region
Iran ranks seventh in global oil production. However, its geography allows it to control the Strait of Hormuz, a vital global shipping channel. The narrow strip of water between Iran and Oman handles between 20 and 30 per cent of global oil and gas supplies.
After Israel’s first strike on Iran over a week ago, oil prices quickly jumped by 8 per cent due to fears of a blockade in the Strait of Hormuz. However, Iran did not block the channel—even after the US targeted three of its nuclear sites with so-called bunker buster bombs.
Interestingly, oil prices dropped even after Iran retaliated by striking the US air base in Qatar. That reactionary strike lowered the likelihood of Iran imposing a blockade on the Strait of Hormuz.
Prices fell further after US President Trump first announced the ceasefire on his Truth Social account.
Related: Tariffs and Iran Oil Crisis Complicate FX Hedging – Overlays Cut Risk, Raise Costs
“The rapid oil price decline earlier today was a sign that the market is taking this agreement as a done deal,” Brooks added. “Brent crude had rallied nearly 20% in the past month as a war premium was attached to the price of oil, which is now being unwound. However, if there are more signs that the ceasefire is not holding, we could see the oil price resume its uptrend.”
Analyst forecasts on oil prices linked to the current Israel-Iran crisis:
| Institution / Analyst (note date) | Base-case view | Stress / worst-case linked to conflict | Time-frame stated |
|---|---|---|---|
| Goldman Sachs(23 Jun 2025) | US $95 / bbl average in Q4 2025 | US $110 / bbl if the Strait of Hormuz is half-blocked for a month | Q4 2025 (base); immediate spike in a blockade |
| J.P. Morgan(23 Jun 2025) | Low-to-mid $60s / bbl through H2 2025 | US $120-130 / bbl (≈ +75 %) if conflict widens or Hormuz closed | Remainder 2025 (base); scenario view |
| Citigroup(19 Jun 2025) | US $75-78 / bbl if 1.1 m bpd Iranian exports lost | ≈ US $90 / bbl if 3 m bpd disrupted for months; higher if Hormuz shut | Multi-month outlook |
| Rystad Energy(17-20 Jun 2025) | Expects prices “capped below $80” while flows continue | > US $100 / bbl if Hormuz closure becomes reality | Near-term (weeks) |
Despite the broader concerns surrounding the Middle East conflict, key market indicators remained stable. The VIX—used to measure market volatility—did not surge meaningfully during the conflict. Stock markets also showed limited reaction.
“The most affected was the Eurostoxx index, which fell more than 2% in the past week. However, US stocks have posted gains,” Brooks continued. “The market had a far stronger reaction to US trade tariffs than to geopolitical risk, which highlights that economic concerns are more worrying for stock markets than geopolitical issues, at this stage.”
This post is originally published on FINANCEMAGNATES.
