Oil, Gold, Nvidia & Cocoa in Focus as US-Iran Tensions Drive Volatility

Escalating tensions between the United States and Iran have pushed energy markets back into focus this week, with renewed military activity around the Strait of Hormuz triggering sharp moves across commodities and equities. While oil prices extended gains on Tuesday, gold rebounded after Monday's decline, Nvidia shares recovered following fresh developments on China exports, and cocoa prices continued their downward trend amid expectations of stronger global supply.

Here are the latest updates:

TL;DR

• The Middle East conflict intensified in recent days, as the US and Iran exchanged strikes across the Strait of Hormuz.

• Oil prices rose sharply as renewed US-Iran tensions and concerns over the Strait of Hormuz increased fears of potential supply disruptions.

• Gold fell on Monday but rebounded on Tuesday as geopolitical uncertainty renewed demand for safe-haven assets ahead of US inflation data.

• Nvidia shares advanced despite tighter US export restrictions on AI chips to China, supported by continued optimism around AI demand.

• Cocoa prices extended losses as expectations of larger harvests in Ivory Coast improved the global supply outlook.

Key developments

US-Iran Tensions Rise: What happened? 

The conflict in the Middle East has intensified sharply over the past several days, with military action, attacks on shipping, and growing concerns over global energy supplies. 

Key developments:

• The US launched a third consecutive night of airstrikes targeting Iranian military infrastructure, including coastal bases and strategic sites near the Strait of Hormuz. The strikes are aimed at reducing Iran's ability to threaten commercial shipping. 

• President Donald Trump announced the US would reinstate its naval blockade of Iran and proposed a 20% transit charge on cargo moving through the Strait of Hormuz, arguing the fee would cover maritime security operations. The proposal represents a significant shift from longstanding US support for free navigation through the waterway. 

• Iran retaliated on multiple fronts, launching ballistic missiles at US military installations in Bahrain and Jordan, while also targeting two UAE-linked oil tankers in Omani waters with cruise missiles. Iran's Revolutionary Guards claimed responsibility, saying the vessels had ignored navigation warnings. 

• The United States has expanded its military presence in the Gulf, deploying additional naval and military assets as fears grow that the confrontation could widen further across the region. (Source: The Guardian) 

Oil Climbs on the Rising US-Iran Tensions

The Strait of Hormuz remains one of the world's most important energy chokepoints, carrying roughly one-fifth of global oil shipments. Therefore, any disruption to traffic through the strait raises concerns over global energy supplies. 

Following the recent developments, Brent crude and West Texas Intermediate (WTI) futures traded higher on Tuesday, 14 July, after surging nearly 10% in Monday's session, their biggest daily gains since 2020. (Source: MarketScreener)

Gold Rebounds After Monday's Decline

Gold prices recovered on Tuesday after falling during Monday's trading session. The precious metal initially weakened as investors monitored comments from Federal Reserve Governor Christopher Waller and awaited the latest US inflation data. However, renewed geopolitical uncertainty surrounding the Gulf region restored demand for traditional safe-haven assets, allowing bullion to rebound from earlier losses. 

Nvidia Shares Recover Amid AI Demand

Nvidia share price moved higher after reports indicated continued strong demand for artificial intelligence hardware, supported by positive commentary surrounding memory supplier SK Hynix. The gains came despite Reuters reporting that Nvidia has significantly reduced the number of Asian customers able to purchase certain advanced AI chips following tighter US export restrictions affecting China. Investors continue to weigh robust AI spending against evolving regulatory constraints on semiconductor exports.  

Cocoa Extends Losses on Improved Supply Outlook

Cocoa prices continued to decline as improving production prospects weighed on sentiment. According to Yahoo Finance, expectations of abundant harvests in Ivory Coast, the world's largest cocoa producer, have eased concerns over supply shortages that previously supported prices. The prospect of stronger global output has contributed to the recent sell-off across cocoa futures.  

Market Outlook

Financial markets seem to be sensitive to developments in the Middle East, particularly around the Strait of Hormuz, where any further disruption could continue influencing energy prices and broader investor sentiment. At the same time, traders are monitoring upcoming US economic data, central bank expectations, corporate earnings releases, developments in the AI sector, and commodity supply trends, all of which continue to shape price movements across global markets.  

 *Past performance does not guarantee future results. The above is for marketing and general informational purposes only, and are only projections and should not be taken as investment research, investment advice or a personal recommendation.