#Gate广场四月发帖挑战 Negotiations end in failure, the Strait of Hormuz blockade, gold and U.S. Treasuries both plummet!

Due to the weekend's failed US-Iran peace talks, coupled with the US plan to blockade the Strait of Hormuz increasing global energy supply shocks, market concerns about inflation rapidly heated up. Shortly after the market opened on Monday, gold and U.S. Treasuries both declined, once again showing a bizarre scene in a panic environment where “safe-haven assets are not safe”…
Market data shows that spot gold prices once dropped by 2.2% after opening today, currently trading around $4,669 per ounce, nearly erasing all of last week’s gains.
Meanwhile, US Treasury futures also fell significantly, with the 10-year Treasury yield rising about 5 basis points after the open.
The overall panic atmosphere in global markets at the open today is undoubtedly evident — as tensions in Iran escalate again, S&P 500 futures fell about 1.1% in early trading. Benchmark Brent crude oil futures surged about 7.5% at the open, reaching $102.37 per barrel. Among traditional safe-haven assets, with gold and Treasuries almost following risk assets in a sell-off, only the US dollar was able to temporarily serve as a “safe harbor” for investors. The ICE US Dollar Index jumped over 40 points after opening in Asian trading hours on Monday, breaking above the 99 level. In non-USD currencies, risk-sensitive currencies like the Australian dollar and British pound declined 0.7% and 0.5%, respectively. The USD/JPY rose 0.3% to 159.78 yen.
Fiona Cincotta, senior market analyst at City Index, said, “Weekend news completely shattered any optimism about peace negotiations. The dollar has become a safe asset, oil prices soared, and all other assets were sold off. On the other hand, we also see that markets sometimes overreact. I think especially in this situation, it’s very difficult for the market to truly price it correctly because there are too many uncertainties and unknown factors.”
The US military has now announced that after failed negotiations with Iran over the weekend to reach a lasting peace agreement, sanctions against Iran will begin at 10 a.m. Eastern Time on Monday, ( and 10 p.m. Beijing time on Monday, ). Previously, the ongoing war in the Middle East for six weeks continues. It is reported that after the weekend’s failed US-Iran negotiations, President Trump stated that the US would blockade the Strait of Hormuz. He posted on social media: “Any Iranian who dares to fire at us or peaceful ships will be blown to pieces!”
Meanwhile, Iran stated it would not allow the US to blockade this waterway. Before the conflict erupted, the Strait of Hormuz carried about one-fifth of the world’s oil and liquefied natural gas. The escalating rhetoric from both sides has made the outside world even more skeptical that the fragile ceasefire reached last week can bring lasting peace.
“Many traders expect the ‘peace dividend’ from last Thursday and Friday might disappear early this week,” said Francis Tan, chief strategist at Indosuez Wealth Asia in Singapore. “Failure of negotiations will shift market sentiment back to defense.” Many analysts note that the increasingly fragile ceasefire between the US and Iran is refocusing bond markets on inflation and reinforcing expectations that interest rates will stay high for longer. This concern is also troubling gold at the moment. Among major safe-haven assets, only the dollar seems to benefit from this. After the peace talks failed and were declared over, for investors in the $31 trillion US debt market, the primary concern is that higher energy costs will exacerbate already high inflation, delaying the Federal Reserve’s rate cuts.
Traders and strategists from Pacific Investment Management Company (Pimco, Brandywine Global Investment Management (Brandywine Global, and Natixis North America are preparing to deal with yields remaining high — and before the inflation outlook becomes clearer, many are reluctant to make major adjustments to their asset allocations.
John Briggs, head of interest rate strategy at Natixis North America, said, “The pendulum has indeed swung back to inflation. The US labor market is at best stable, and structurally not very active, but for now, inflation is on the agenda.”
Last Friday’s US March inflation data showed the CPI increased at the fastest pace since 2022. This pushed the 10-year Treasury yield above 4.3% and prompted traders to cut back on bets of rate cuts this year.
Nick Twidale, chief market analyst at AT Global Markets Australia Pty, said before the Asian session opened, “I think due to risk aversion, oil prices will open higher along with the dollar on Monday. The stock market is expected to suffer a significant hit, and Treasury yields will be pushed higher. For me, the key point over the past few days is that shipping volume through the Strait of Hormuz remains below 10% of normal levels, which is disappointing. Most investors had hoped for more shipping passing through the strait after the ceasefire was announced.”
Capital analyst Kyle Rodda pointed out that for US Treasuries, the market is weighing safe-haven demand against inflation readings. Once oil prices are pushed higher by concerns over the Strait of Hormuz, inflation expectations will quickly reprice, setting a bottom for yields. He further wrote, “The key question on Monday is how the market interprets it: whether the threat over the weekend is seen as a temporary breakdown of negotiations or a structural collapse of the ceasefire framework. This distinction will determine whether safe-haven flows quickly fade or extend further. Clearly, the situation is quite volatile, so we need to watch for any progress when negotiations restart or if both US and Iran’s public statements become more confrontational again.”
In the foreign exchange market, Fiona Lim, senior strategist at Maybank, said, “Weekend news may be somewhat disappointing, but it’s not entirely unexpected. When markets open on Monday, the dollar may further strengthen. Some Asian currencies, especially energy-importing currencies — the Korean won, Philippine peso, Japanese yen, Thai baht — had already started weakening before the weekend and may continue to be under pressure this week.”