The never-ending deadlock between the US and Iran has reached its breaking point. The market is becoming "numb," but the risk remains.
The US-Iran conflict has reached a breaking point, and markets are becoming "accustomed to war news." Although oil and stocks remain stable, the risk of inflation remains a ticking time bomb. Meanwhile, Hua Seng Heng sees gold beginning to recover from its lows, with a chance of a bullish reversal.
(April 10, 2569) – Hua Seng Heng It is assessed that the conflict between the United States and Iran at this time is evolving towards... "Strategic pressure game" The situation has been more protracted and complex than the market anticipated, particularly the "deadline" which has been repeatedly postponed, signaling that the conflict and negotiations will not be able to reach a conclusion anytime soon.
Despite an earlier proposal for a 45-day ceasefire from a group of mediators, the idea was not accepted by either the United States or Iran. Recently, both sides reached a ceasefire agreement just two weeks prior, to allow for negotiations and partially reopen the Strait of Hormuz. This eased pressure on energy markets and led to a decline in oil prices, while stock markets improved, reflecting investors' assessment that the situation had not yet escalated in the short term. However, the agreement remains fragile and could fail at any time if negotiations cannot reach a resolution.
However, the significant change lies more in the "behavior of the financial markets" than in the news itself. Despite the continuous and tense news coverage, oil prices did not rise as sharply as in the past, remaining within a limited range. This reflects investors beginning to "adapt" and reduce their panic.
In the stock market, overall there is still accumulated buying interest in fundamentally sound assets during market corrections. This prevents the investment atmosphere from fully entering a risk-averse phase and helps limit the flow into safe-haven assets in the short term, resulting in the market remaining supported to some extent.
Meanwhile, the U.S. government bond market and the dollar remain key variables for investors to monitor. If the conflict escalates and causes oil prices to surge, U.S. inflation could accelerate again, forcing the Federal Reserve to slow down interest rate cuts and keeping bond yields at high levels. This could also lead to a stronger dollar and limit the upside potential of safe-haven assets in the short term.
In this game, Trump may not back down.
Nouriel Roubini, an American economist and professor of Iranian-Jewish descent, best known by the nickname "Dr. Doom" for predicting the 2008 subprime mortgage crisis in the United States, analyzed on Bloomberg Television that the current situation may have reached "a point where the United States has no way to back down." Furthermore, Roubinee assessed that Trump has only two main options:
1) “Reduce the severity level.” Entering a ceasefire, while seemingly a solution, carries high risks. This option could allow Iran to rebuild its military, enhance its nuclear weapons capabilities, and increase its influence over the Strait of Hormuz, a vital global energy shipping route. Furthermore, ending the war could lead to a crushing defeat for Trump in the midterm elections in November 2026, both in the House of Representatives and the Senate, as the public would view his decision to start a war as a government failure.
2) "Elevate the attack to end the game." (Escalate and finish the job) Roubini estimates there is a 67% probability that the US will choose this method, with a greater chance of winning than losing. He argues that Iran poses a direct threat to Israel, Europe, Asia, and the US, making it necessary to seize Iran's Khark Island through heavy and continuous attacks over several weeks, including opening the Strait of Hormuz to pressure Iran into collapse. This would allow the US to fully achieve its objective.
However, if the situation escalates into a more violent conflict, in the short term, oil prices could potentially surge above $120 per barrel due to the risks to energy transportation routes. In the long term, if the conflict ends and the region returns to stability, the energy market may gradually return to equilibrium.
Conversely, if the United States chooses to back down or is unable to control the situation, the likelihood of Iran blocking the Strait of Hormuz will increase significantly, potentially pushing the global economy into a state of stagflation, similar to the crisis of the 1970s.
"Gold is undergoing a correction, with a potential bullish reversal if the war is resolved soon."
At a time when global financial markets are still under pressure from the ongoing war, which has driven oil prices higher, hovering above $100 per barrel, further reflecting potential short-term inflation, even though investors had previously faced considerable "crisis sell-offs in gold," particularly the sharp drop that pushed prices to a low of around $4,100.
This Hua Seng Heng The analysis suggests that this level represents a significant "technical turning point." As this represents support at the 200-day moving average (SMA 200 days) and clear buying pressure is emerging, it reflects that medium- to long-term investors are beginning to accumulate gold again. An interesting positive signal is the price structure which is consistently showing "higher lows," indicating that selling pressure is weakening while buying pressure is gradually returning.
A key momentum occurred on March 31st, when gold prices surged and successfully broke through the 100-day moving average (SMA), a positive signal in terms of momentum. However, investors still need to closely monitor whether the price can sustain itself above this level.
Gold price in the world market
- Resistance levels are at $4,800/$5,000, with a primary target of $5,200.
- Support levels are at $4,300 / $4,100.
Domestic gold bar prices.
- Resistance levels are at 73,500 / 75,500 baht and 77,500 baht.
- Support level at 67,000 / 65,000 baht.
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