The United States has signaled plans to intensify economic pressure on Iran, including maintaining a naval blockade and imposing sweeping new sanctions, as Middle East tensions continue to escalate. Treasury Secretary Scott Bessent said the measures would be "unprecedented" for Iran, combining broader economic isolation with the ongoing naval blockade of Iranian ports, though he did not provide specifics.
Defense Secretary Pete Hegseth added that the US military could sustain the blockade indefinitely by rotating naval assets. Reports indicate the USS George Washington is replacing the USS Abraham Lincoln, whose deployment has been extended well beyond its original schedule. Hegseth dismissed reports of poor living conditions on the Lincoln, but Representative Mike Levin said he had written to Pentagon and Navy leaders expressing concerns from military families about supply shortages, sanitation issues, and crew fatigue. US Central Command also denied Iranian media reports of a deadly brawl aboard the carrier.
Gold rises on Fed rate pause expectations
Gold climbed on Friday and remained on track for a weekly gain, supported by a weaker dollar and reduced expectations of a September Federal Reserve rate hike. Spot gold rose 0.5% to around $4,375 per ounce, recovering from the previous session's profit-taking pullback from a two-month high. US gold futures settled 0.25% higher.
The move followed a week of US economic data showing inflation broadly in line with expectations and weaker-than-expected July employment figures. According to CME FedWatch, markets now assign roughly a 33% probability of a September rate increase, down significantly from the previous week. This has reinforced expectations that the Fed will keep rates within the current 3.50% to 3.75% range at its next meeting. A softer dollar also made bullion more affordable for overseas buyers, while silver, platinum, and palladium all posted gains.
Oil advances on supply disruption fears
Oil prices moved higher on Friday and were set for solid weekly gains as geopolitical tensions in the Middle East overshadowed concerns about weaker global demand. Brent crude rose to about $88.54 a barrel, while West Texas Intermediate traded near $82.34, with both benchmarks on track to finish the week more than 4% higher.
Supply concerns intensified after two vessels operated by Abu Dhabi National Oil Company were attacked while transiting the Strait of Hormuz, and shipping traffic through the strategic waterway remained below normal levels. Additional support came from a reported drone attack that suspended crude exports from Russia's Sheskharis terminal at Novorossiysk. However, analysts noted that weaker demand forecasts from OPEC and rising US crude inventories continue to limit upside for oil prices.
Bitcoin struggles despite improving macro backdrop
Bitcoin remained under pressure on Friday even as US equities traded near record highs following encouraging inflation data. The cryptocurrency traded around $62,770, down about 0.9% on the day and close to its lowest levels of August. Analysts noted that Bitcoin has failed to benefit from the improving macroeconomic backdrop that has supported stocks and reduced expectations for further Fed tightening.
Technical analysts warned that Bitcoin needs to reclaim the $63,220 level before the weekly close to avoid increasing the risk of a deeper decline. Market observers also pointed to growing long positions in derivatives markets and rising open interest, suggesting the potential for additional volatility if prices continue to weaken. For context on broader market moves, see our coverage of cooling US inflation and Dow's climb on Hormuz hopes.
As the situation evolves, investors are closely watching the interplay between geopolitical risks, monetary policy expectations, and commodity price movements. The coming weeks will likely see continued volatility across asset classes as markets digest these developments.
This article is for informational purposes only and does not constitute financial advice.
