Gotrade News - Brent crude jumped 3.4 percent to USD 107.77 per barrel during Tuesday's trading session. WTI also strengthened 4.2 percent to USD 102.18 per barrel amid the US-Iran diplomatic stalemate.
The conflict escalation pushed gold prices down 1 percent to USD 4,685.99 per ounce. India moved quickly to prepare emergency measures to safeguard foreign reserves amid the energy price surge.
Key Takeaways:
- Brent rose 3.4 percent to USD 107.77 and WTI climbed 4.2 percent to USD 102.18 per barrel.
- Gold instead fell 1 percent to USD 4,685.99 per ounce on higher-for-longer rate concerns.
- India curbed imports and raised fuel prices to defend the rupee, which sank to 95.63 per dollar.
Oil and Gold Prices Move in Opposite Directions
According to Liputan6, the oil rally was triggered by President Trump's rejection of Iran's counter-proposal. Trump called Tehran's offer "garbage" and said the ceasefire stood at a critical juncture.
The Strait of Hormuz remains effectively closed, seriously disrupting global crude oil flows. WTI and Brent prices have now surged more than 45 percent since the conflict erupted on February 28.
Investors seeking exposure to oil price movements can look at USO as a crude oil proxy. Integrated energy sector exposure is also available through oil majors such as XOM.
By contrast, gold prices lost momentum after briefly serving as the primary safe haven. As reported by Liputan6, June gold futures corrected 0.7 percent to USD 4,693.90 per ounce.
Bart Melek of TD Securities said the oil spike raised stagflation concerns across global markets. This condition may push the Fed and other central banks to hold interest rates higher for longer.
Despite the short-term pressure, UBS Investment Bank strategist Joni Teves remains bullish on gold. UBS projects gold will set fresh all-time highs again before the end of this year.
For investors who want continued gold exposure through equities, GDX is the primary choice on GTG. This ETF holds global gold mining names that are highly sensitive to precious metal price movements.
India Prepares Emergency Foreign Reserves Measures
Energy price pressure hit India directly as the world's third-largest oil importer. The Indian rupee plunged to an all-time low of 95.6313 against the US dollar on Tuesday.
Per Kumparan, India's government raised fuel prices and restricted non-essential goods imports. The curbs cover gold bullion through consumer electronics to limit foreign reserve outflows.
The Reserve Bank of India trimmed banks' daily open position limit to USD 100 million. The RBI also intervened in markets to slow the rupee, already Asia's worst-performing currency in 2026.
India's foreign reserves shrank to USD 690.7 billion as of May 1, covering 10 to 11 months of imports. That figure marks the lowest level in more than a month.
Prime Minister Narendra Modi stepped in to urge citizens to conserve fuel and postpone overseas travel. Economist Garima Kapoor said Modi's appeal reflects genuine pressure on the country's foreign reserves.
This geopolitical tension is also pushing global investors to seek defensive assets in US equity markets. Energy price pressure is expected to remain a dominant theme until US-Iran diplomacy gains clarity.
Sources:
- Oil Prices Soar Again Today, See the Triggers (Liputan6)
- Gold Prices Crash Today as US-Iran Peace Plan Falters (Liputan6)
- India Prepares Emergency Measures to Safeguard Reserves Amid Iran War (Kumparan)
