ATFX: Trump says the conflict will end in a few weeks; oil prices fall, gold rises

Topic: ATFX FX Column Submission

On April 1, ATFX: After Iran’s supreme leader Khamenei was killed in an explosion on February 28, Trump repeatedly said in public that he would end the war within four weeks. It is already April now, and Trump’s originally set deadline for the war has long passed, but the U.S.–Iran conflict is still ongoing. Since the war was not ended within the planned timeframe, Trump has not only lost international reputation, but also lost domestic approval ratings.

The United States didn’t gain much in this war, but it must be admitted that the U.S. still holds the initiative in this conflict. As long as Trump chooses to call off the fighting, Iran will most likely stop its attacks. Therefore, every time Trump comments on the end date of the conflict, it will trigger sharp volatility in the market.

Trump’s latest remarks said: the U.S.–Iran conflict will end within the next two to three weeks, because there is no longer any reason for us to stay there. He also said that the U.S. and Iran may reach an agreement before the conflict ends, but even if they don’t reach one, the conflict can still end.

On the same day, Iran’s official side also issued relatively moderate statements, saying that as long as their demands are met—especially the assurance that they will no longer be attacked—the conflict can be brought to an end. Within just one day, the U.S. and Iran released comments that eased tensions one after another, prompting speculation about whether both sides are already approaching a critical point for reaching an agreement. If that turns out to be true, the probability that the Strait of Hormuz will reopen completely will rise significantly, and international oil prices may come under pressure.

We believe Trump has lost patience and may not want to keep getting entangled in the Iran issue. The longer the U.S.–Iran conflict lasts, the lower Trump’s domestic poll approval ratings become. This tendency leads to overnight declines in international oil prices and gains in gold.

▲ATFX chart

As for market trend: on a daily timeframe, since March 16, U.S. crude oil has maintained a sideways and consolidating pattern. Although it has repeatedly broken through the $100 whole-number level, it has been unable to effectively expand gains. On Tuesday of this week, it reached a high of 103.38, then fell for two consecutive days; the latest price is already outside the lower rail of the upward channel. If there is no major rebound this week, and the closing price remains below the channel line, it may mean that the uptrend in U.S. crude oil has ended. Once signs of easing appear in the U.S.–Iran conflict, U.S. crude oil may see a sharp drop.

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责任编辑：陈平