Harmovest Capital | Key Insights: Will Hormuz tensions drive oil and inflation higher?

05 May 2026 | Key Highlights

• Escalation risks in the Iran conflict

• Safe-haven sentiment rises

• US Dollar Index continues to strengthen

Market Review

Tensions in the Strait of Hormuz have intensified, with the US and Iran entering a new phase of maritime confrontation over control of key shipping routes. This has disrupted global shipping and increased uncertainty in oil supply, pushing energy prices higher. As a result, concerns over rising inflation have intensified. Against this backdrop, safe-haven demand has surged, with capital flowing into the US dollar and Treasuries, driving the US Dollar Index higher.

Summary

Geopolitical risk escalation has become the dominant market driver, lifting inflation expectations and US Treasury yields, which in turn supports a stronger US dollar. Meanwhile, precious metals are facing short-term pressure, with overall momentum remaining weak.

Today's Focus

• Eurozone Manufacturing PMI

Markets expect European economic data to remain resilient. A stronger-than-expected reading may provide support to the euro and risk assets.

Market Impact

USD | Gold | US Equities

Strategy

Maintain a short-term bullish bias on precious metals

Market Sentiment

The Fear & Greed Index has risen to 63, indicating improved risk appetite compared to previous levels. As markets gradually digest geopolitical tensions, safe-haven demand has started to ease.

Technical Analysis (XAUUSD)

Gold has continued its pullback after breaking below the key 4660 support level. The short-term structure remains weak, with further downside risk toward the 4600 area.