Oil and Gold Slip as Markets Calm After Trump Remarks on Iran

BY COMFORT OGBONNA

Oil prices pulled back sharply from recent multi-month highs on Thursday, while gold retreated from a fresh all-time peak, as global markets reacted to remarks from U.S. President Donald Trump that eased fears of imminent military escalation with Iran. The shift in tone provided some relief to investors who had been bracing for the possibility of deeper geopolitical turmoil, which earlier sent energy and precious metals sharply higher.

The easing in commodity prices came alongside a continued selloff in technology stocks, a trend that first surged through Wall Street and carried over into Asian sessions. Investors have begun rotating out of soaring chipmakers and artificial intelligence-focused companies, cashing in on gains and moving funds into sectors viewed as undervalued. Analysts suggested the pullback reflects a broader search for balance, rather than deep pessimism, as the recent rally in tech names pushed valuations to aggressive levels.

In currency markets, the wave of volatility that rocked the yen on Wednesday calmed for the moment. The Japanese currency briefly sank to its weakest point since July 2024—triggering alarm bells over possible government intervention—before rebounding sharply late in the session. Japanese officials issued pointed reminders that they stand ready to act against erratic foreign exchange swings, reinforcing expectations that Tokyo will defend the yen if selling pressure intensifies.

Bond markets in Japan also shifted direction, particularly in longer-dated government securities, which saw yields ease back after setting historic highs earlier in the week. Speculation that Prime Minister Sanae Takaichi would dissolve parliament and move toward snap elections instantaneously reshaped market expectations. Confirmation of those plans on Wednesday added weight to forecasts of increased fiscal spending, which initially sent yields soaring but has since stabilized as investors reassessed the long-term implications.

Global oil benchmarks, which surged strongly the previous day, saw a notable pullback. Brent futures slipped 3.4% to $64.25 after climbing as high as $66.82, while Nymex crude matched the decline, falling to $59.89 from intraday highs above $62. The reversal followed Trump’s statement that reports of massive executions during Iran’s crackdown on nationwide protests were fading and that no large-scale military action was imminent—comments that eased immediate concerns of escalation in the Middle East.

Gold, which has been repeatedly setting new milestones, also cooled. After touching an unprecedented $4,642.72 per ounce on Wednesday, the metal dipped roughly 0.5% to about $4,598 in early Thursday trade. The retreat reflected investors’ broader shift away from safe-havens as risk sentiment steadied.

Equities across Asia delivered a mixed picture. Japan’s Nikkei, heavily weighted toward technology, slipped 0.9% after reaching an all-time record the previous day, while the broader Topix index powered higher by 0.8%, marking another personal best and signaling continued confidence in sectors outside tech.

Taiwan’s TAIEX fell 0.4% and Hong Kong’s Hang Seng lost 0.5%, both pressured by weakness in semiconductor-related stocks. Chinese blue chips dipped slightly, while South Korea’s KOSPI bucked the trend, climbing as much as 1.3% to a record high following the Bank of Korea’s decision to leave interest rates unchanged and telegraph the end of its rate-cutting phase to protect financial stability.

European markets appeared poised for further gains, with FTSE futures up 0.6% and Euro-zone STOXX 50 futures edging 0.3% higher. Meanwhile, U.S. equity futures were subdued after Wednesday’s declines, which saw the S&P 500 fall 0.5% and the Nasdaq slide 1%, weighed down by the tech retreat.

Market analysts argue that despite headline weakness, the underlying structure of the equity market remains firm. Kyle Rodda of Capital.com said the growing strength in cyclical sectors—benefiting from optimism around U.S. economic momentum suggests a broadening rally rather than a contraction. Investors are watching whether this rotation continues, potentially marking a new phase where gains become more evenly distributed across industries.

Currency traders saw calmer conditions on Thursday as the dollar index edged slightly higher to 99.137, with the greenback holding steady at 158.44 yen after Wednesday’s whipsaw. Japanese Finance Minister Satsuki Katayama reiterated Japan’s readiness to act against excessive movements, keeping intervention risks firmly in view.

Political developments are now front and center in Japan, after confirmation that Prime Minister Takaichi plans to dissolve parliament’s lower house next week and schedule a national vote as early as February. Investors anticipate that a renewed mandate would pave the way for more aggressive economic stimulus, a key force behind recent volatility in both the yen and longer-term government securities. Yields on Japan’s 20-year bonds eased by 2.5 basis points to 3.135%, having surged to an unprecedented 3.165% the day before.

Across markets, traders and analysts are now looking to see whether the recent cooling in commodities and technology selling will steady global sentiment, or whether geopolitical uncertainty and shifting monetary policies will continue to test nerves through the weeks ahead.