Evening Digest: Trump rejects Iran truce extension, gold, oil gains

The prospects for a US-Iran peace deal weakened after President Donald Trump rejected an extension of a June truce agreement.

Gold prices rose as a weaker dollar and reduced Federal Reserve rate-hike expectations supported demand for the precious metal.

Oil prices climbed as uncertainty over the Strait of Hormuz raised concerns about global supply disruptions.

Bitcoin recovered toward $64,000 as investors weighed geopolitical tensions and increasingly crowded long positions in derivatives markets.

Trump rejects Iran truce extension

President Donald Trump said the US would not seek an extension of the memorandum of understanding with Iran, which was due to expire Monday.

The agreement had been intended to provide a 60-day window for Washington and Tehran to negotiate a longer-term peace deal.

Trump said the US retained leverage over Iran through its naval blockade of Iranian ports and continued to argue that Washington had control over the Strait of Hormuz.

Iranian officials, meanwhile, warned that Tehran could escalate tensions in the Strait and across the region if diplomatic efforts with the US fail.

Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said negotiations with Oman over managing shipping through the waterway were continuing but remained complicated.

Tensions also increased in Lebanon after Israel said it killed a senior Hezbollah commander. Israeli strikes in southern Lebanon killed 11 people on Saturday, according to the report.

Gold price rises as Fed hike bets fade

Spot gold rose 0.94% to $4,417.14 an ounce, while US gold futures settled 0.85% higher at $4,475.00.

The gains came as the US dollar fell to its lowest level in more than two months, making gold less expensive for buyers holding other currencies.

Markets have also reduced expectations for a Federal Reserve interest-rate increase after weaker-than-expected payrolls and subdued consumer inflation data.

CME FedWatch data showed traders pricing in a 33% probability of a September rate increase, down from 51.2% a month earlier.

TD Securities’ global head of commodity strategy Bart Melek said the gold market appeared to be pricing in a stagflationary environment.

Investors are now awaiting minutes from the Fed’s July meeting, due Wednesday, for further clues about monetary policy.

Silver rose 2.1% to $66.01 an ounce, while platinum gained 1.3% and palladium advanced 1.1%.

Oil climbs as Hormuz uncertainty persists

Brent crude settled $2.24, or 2.53%, higher at $90.76 a barrel, while West Texas Intermediate gained $2.18, or 2.65%, to $84.58.

Oil prices have gained more than 5% since last week after attacks on vessels in the Strait of Hormuz and continued uncertainty surrounding negotiations over reopening the key shipping route.

Five commodity vessels passed through the Strait on Saturday, while none were registered on Sunday, according to Kpler data.

Before the US-Israeli attacks on Iran began, the waterway handled about one-fifth of global oil and liquefied natural gas supplies.

Bitcoin rebounds toward $64,000

Bitcoin gained more than 2% on Monday, returning toward $64,000 as US stocks weakened and investors monitored the latest developments in the Middle East.

The cryptocurrency’s rebound came despite elevated derivatives-market positioning.

Funding rates reached a 20-month high of 0.022 on August 14, according to CryptoQuant, indicating that traders were increasingly positioned long.

QCP Capital said Bitcoin remained near the lower end of its recent trading range and that a sustained move outside that range would provide a clearer indication of market positioning.

Crypto liquidations remained relatively muted, with 24-hour cross-crypto liquidations at about $180 million as Bitcoin recovered.

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