Dollar Falls on US-Iran Peace Hopes; Gold Up 1%, Oil Down 7%

On Monday, sources said that the United States and Iran are discussing a plan to open the Strait of Hormuz about 30 days after the two countries reach an agreement to end hostilities. Once an agreement is reached, Iran will clear the mines in the strait within a 30 day period. The report also stated that the ceasefire agreement reached in early April will be extended for 60 days. During this two month ceasefire period, both sides plan to negotiate on Iran's nuclear program. The US dollar index opened low and closed down 0.35% at 98.97; The benchmark 10-year Treasury yield closed at 4.563%, while the 2-year Treasury yield sensitive to the Federal Reserve policy rate closed at 4.132%. On May 25th, driven by the hope of the US Iran peace agreement, spot gold surged 1.4% to $4570 per ounce. Brent oil prices fell nearly 7% below $100, causing the US dollar to weaken, easing inflation concerns and lowering expectations for the Federal Reserve to raise interest rates. Although there are still differences in negotiations, the dawn of peace has significantly boosted gold prices, and gold is expected to maintain its strength in the short term. However, in the long run, attention still needs to be paid to the progress of the agreement's implementation. The market's expectation of reopening the Strait of Hormuz has pushed oil prices below $100 per barrel, although both the United States and Iran have downplayed the possibility of a recent agreement. WTI crude oil ultimately closed down 6.91% at $90.29 per barrel; Brent crude oil ultimately closed down 7.14% at $96.28 per barrel.