Institutional investors continue to reduce their presence in metals

The US stock indices closed with a sharp surge amid the official signing of a peace agreement between the United States and Iran. The diplomatic breakthrough and the imminent unblocking of the Strait of Hormuz sent oil prices down by 5%, instantly easing global business inflation concerns. By the end of the day, the Dow Jones Index (US30) rose by 0.92%. The S&P 500 Index (US500) gained 1.65%. The Technology Index NASDAQ (US100) closed higher by 3.06%.

The drop in energy prices triggered a powerful inflow of capital into sectors directly dependent on fuel costs. The transport sector and the travel industry became the growth leaders: United Airlines shares rose by 3.9%, Norwegian Cruise Line gained 3.7%, and Carnival Corp. strengthened by 3.2%. Elon Musk’s space giant continues to rewrite records after its Friday debut. The company’s shares jumped another 15%, consolidating around 185 dollars per share and pushing SpaceX’s market capitalization to an unprecedented 2.3 trillion dollars. The main outsider of the day was the media group Fox Corp., whose shares collapsed by 17%. Investors reacted extremely negatively to the official announcement of the acquisition of the streaming platform Roku for 22 billion dollars. The market considered the deal price significantly overvalued.

European indices closed mixed on Monday. By the end of the day, Germany’s DAX (DE40) rose by 1.05%, France’s CAC 40 (FR40) closed up by 0.40%, Spain’s IBEX 35 (ES35) gained 1.43%, while the UK’s FTSE 100 (UK100) ended the session lower by 0.39%.

The main beneficiary of the Middle East de-escalation was Europe’s real sector. Since the European region critically depends on hydrocarbon imports, the collapse in oil prices (which fell below 80 dollars per barrel on Monday) removed market fears of a prolonged energy crisis. The strongest upward dynamics were demonstrated by shares of automotive manufacturers and airlines, whose costs are directly tied to fuel prices. Investors are encouraged by the prospect of a full unblocking of the Strait of Hormuz, which will begin immediately after the memorandum is signed in Switzerland this Friday. Under the terms of the agreement, the United States will lift the naval blockade of Iranian ports, and Iran will be obliged to fully clear the strait’s waters of deployed naval mines.

The Swiss franc (CHF) showed a confident rebound, strengthening to 0.79 francs per US dollar and recovering from a two‑month low. The weakening of the US currency was caused by overall market optimism amid news of the imminent end of the Middle East crisis. The decline in global oil prices to a two‑month low (around 80 dollars per barrel) significantly simplified the task for the Swiss National Bank (SNB) ahead of its upcoming meeting. Domestic economic indicators also confirm the disinflationary trend – in May the Index surprised by falling 0.4% month‑over‑month. The decline in domestic producer prices combined with the sharp collapse in commodity prices virtually guarantees that the SNB will keep its key interest rate unchanged at its June 18 meeting.

Large institutional investors continue to reduce their presence in metals. Last Friday, long positions in gold ETFs fell to a 6.5‑month low, showing a deep pullback from the 3.5‑year high recorded at the peak of the Middle East crisis on February 27. A similar picture is seen in silver ETFs – holdings there fell to a 10.5‑month low (the peak was reached on December 23).

On Tuesday, crude oil prices (WTI) fell below 81 dollars per barrel, extending the decline after nearly a 5% drop in the previous session. Investors are cautious as they await details of the proposed peace agreement between the US and Iran, which is expected to be signed in Switzerland on Friday. Although Donald Trump stated that the deal will restore the free flow of oil from the Persian Gulf, the absence of an official memorandum text is forcing shipping companies to delay vessel departures until full clarity emerges.

On Monday, Japan’s Nikkei 225 (JP225) surged by 4.99%, China’s FTSE China A50 closed higher by 1.46%, Hong Kong’s Hang Seng (HK50) gained 0.50%, and Australia’s ASX 200 (AU200) closed up by 1.25%.

The Australian dollar fell to a two‑month low around 0.705, reacting sharply to the results of the Reserve Bank of Australia meeting. The RBA decided to hit the brakes, unanimously keeping the base interest rate at 4.35%. This step followed an aggressive series of three consecutive hikes in February, March, and May, which the regulator needed to combat the second wave of inflation triggered by the spring blockade of the Strait of Hormuz. Most economists agree that the RBA will remain at the current plateau of 4.35% at least until the end of winter (the next meeting is scheduled for August 11).