US: MNI POLITICAL RISK - Trump Asks For Patience In Iran War

Oil prices have continued to rally amid the effective closure of the Strait of Hormuz and wider escalation in the Middle East, with WTI & Brent rallying by more than 8%, breaching yesterday’s highs.

• U.S. President Trump has stressed that the U.S. will do "whatever it takes" to achieve its military objectives in Iran. Several senior U.S. officials have signalled an impending significant expansion in in strikes.
• Elsewhere, recent comments from the IEA point to a readiness to stabilise the oil market, ahead of holding an Iran-centric meeting later today.
• Some sell-side names have suggested that the effective closure of the Strait of Hormuz and continued attacks on shipping vessels/infrastructure are likely to persist for at least four weeks, with disruptions to LNG & oil flows lasting longer.
• Fibonacci projections ($84.42 for Brent & $78.05 for WTI) present the next upside targets of note.

DUJ6 106.50p, bought for 14.5 and 15 in 6k (ref 106.52 in DUM6).

The firmer USD and hawkish repricing across core global STIR curves pressured gold into the London-NY handover before spot found support just ahead of the 20-day EMA ($5,075.8/oz), recovering to $5,160/oz at typing, as the bid for the greenback stalls and equities base.

• Cross-market inputs outweighed the bullish support stemming from the escalation in the Middle East through London morning trade, with the intersection of the two inputs key for bullion in the short-term.
• Note that yesterday’s rally failed to challenge the 30 January high ($5,451.0/oz) leaving initial technical parameters well-defined, with the recent bullish move stalling a little.