Financial markets are continuing their downward movement from Friday at the start of the new week. New threats against energy infrastructure in Iran are creating ongoing uncertainty and pushing crude oil prices higher.
Instead of signs of easing tensions around the Strait of Hormuz, threatened retaliatory actions by Iran are weighing on market sentiment. Oil prices are rising by around 2% at the start of the week. US crude WTI is trading again near the 100 US dollar per barrel mark, while Brent crude from the North Sea is climbing to around 108 US dollars.
Weak signals from Asia
Asian markets are providing clearly negative signals at the beginning of the week. Japan’s Nikkei 225 is down around 3.35%, while Hong Kong’s Hang Seng is falling by approximately 3.93%.
The weak performance reflects growing nervousness among market participants and suggests that European stock markets may also start the trading session under pressure.
Futures indicate a weak start in Europe
Pre-market trading already points to notable losses. DAX futures (June) are down around 1.95%, while CAC 40 futures (April) are losing about 2.10%. Euro Stoxx 50 futures (June) are also declining by roughly 1.70%.
This puts the 22,000-point level into focus for the DAX. If this important support level does not hold, downward pressure on the index could increase further.
US index futures are also trading lower in pre-market activity, although the declines are more moderate. Dow Jones futures are currently down around 0.55%, while S&P 500 futures are losing approximately 0.70%.
The comparatively smaller reaction may be due to the fact that the US economy is less dependent on oil imports, as the United States itself is one of the world’s largest oil producers.
Gold and silver under strong pressure
Gold prices remain under significant pressure. Rising oil prices, falling equity markets, and increased demand for the US dollar are weighing on the precious metal at the start of the week.
Gold is currently down around 7.4% and has fallen below the 4,300 US dollar level. If this level is broken sustainably, the area around 4,000 US dollars could become the next key zone for market participants.
Silver is showing even greater weakness. It is down around 10% and is currently trading just below 62 US dollars. Here, the 60 US dollar level is likely to be closely watched as an important support.
Crypto market also weaker
Cryptocurrencies are also unable to escape the negative market sentiment. Bitcoin has fallen back below the 70,000 US dollar mark and is currently trading around 68,350 US dollars, representing a decline of about 1.2%.
Ethereum is showing even more weakness, dropping around 3.4% to approximately 2,038 US dollars. This brings the psychologically important 2,000 US dollar level back into focus.
Outlook: geopolitics remains the key driver
Market developments this week are likely to remain heavily influenced by the geopolitical situation in the Middle East. In particular, potential escalations involving energy infrastructure and the Strait of Hormuz will remain in focus for investors.
At the same time, macroeconomic data should not be overlooked, as it may also influence market movements. In the current fragile environment, even individual headlines could be enough to significantly shift market direction in the short term.
