I. Crude Oil: Middle East Geopolitical Risks Trigger Supply Concerns, Oil Prices Surge Sharply

Key Developments

1. Yemen’s Houthi movement announced on September 14 local time that it launched a large-scale attack using ballistic missiles and drones against Saudi Arabia’s Khamis Mushait Air Base. Saudi Arabia issued emergency alerts across multiple regions. The Gulf regional talks scheduled in Oman to discuss shipping safety in the Strait of Hormuz were postponed at Saudi Arabia’s request, shattering market expectations of de-escalation in the Middle East.
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3. Saudi Arabia’s major east-west oil pipeline bypassing the Strait of Hormuz was shut down after a drone attack recently. The pipeline has a maximum daily transport capacity of 4–5 million barrels and serves as a backup lifeline for Saudi crude exports. Its shutdown disrupted massive crude shipments, prompting upward revisions to forecasts for global crude supply shortages. An estimated supply reduction of around 2.5 million barrels per day is expected, pushing Saudi crude supply down to its lowest level in more than three decades.
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5. Chevron CEO Mike Wirth publicly warned that global petroleum buffer inventories keep depleting, and there is limited room to release strategic petroleum reserves. A prolonged Middle East conflict creates risks of an oil crisis. The US official side stated that the oil price rally is a temporary fluctuation and denied considering a ban on petroleum product exports.
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Market Closing Data (Sep 14)
 

• NYMEX WTI crude front-month contract: Settled at $101.39 per barrel, up $1.34, or +1.34%. The intraday high briefly touched $103.8 per barrel.
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• ICE Brent crude front-month contract: Settled at $105.68 per barrel, up $1.07, or +1.02%. It spiked to near $108.65 at one point.
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• Side impacts: US retail diesel prices hit all-time highs, while European natural gas also rose in tandem.
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Institutional Views: The short-term pricing logic for crude oil has shifted from supply-demand fundamentals to the geopolitical risk premium. As long as attack risks persist for shipping in the Strait of Hormuz and the Red Sea, oil prices tend to rise easily and resist declines. However, any positive signs of Middle East diplomatic progress could trigger a rapid unwinding of price gains.
 

II. Gold: Haven Buying Fails to Support Prices; High US Treasury Yields + Rate Hike Expectations Pressure Gold

Key Developments

 

1. The Middle East conflict lifted oil prices, leading markets to reprice risks of a rebound in inflation. The probability of an interest rate hike at the Fed’s September policy meeting this week rose sharply. CME market pricing put the odds of a rate hike close to 90%. The US 10-year Treasury yield briefly broke above 5%, the US Dollar Index strengthened, and real interest rates climbed, directly weighing on gold, a non-interest-bearing asset. This created an abnormal market dynamic: geopolitical conflict yet falling gold prices.
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3. Previously, markets had priced in Middle East diplomatic easing and rate-cut expectations, which pushed gold prices into a temporary rebound. Confirmation that the Oman Strait of Hormuz talks would be postponed invalidated optimistic expectations and triggered concentrated profit-taking on long gold positions, sending gold sharply lower. Spot gold in London dipped below $4,300 per ounce at one point, hitting a low of $4,276 per ounce with a maximum single-day drop exceeding 1.6%. COMEX gold futures fell more than 2%.

Market Action (Sep 14–15, Asian Session)
 

• London spot gold: Low of $4,276/oz; traded around $4,288 amid range-bound movement at lows during Asian hours.
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• COMEX gold futures: Low of $4,309/oz, maintaining a weak bias in the short term.
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• Silver also tumbled alongside gold. London spot silver hit a low near $62.9, with a larger decline than gold due to higher price elasticity.
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Institutional Views The core short-term conflict for gold: Rising inflation expectations driven by expensive oil → Fed keeps policy tight and real rates stay elevated, overwhelming haven buying demand stemming from geopolitics. Short-term bearish factors are expected to be gradually digested after the Fed policy decision. If a rate hike is delivered this time, focus will shift afterward to Fed officials’ stance shown in the dot plot. In the medium to long run, gold’s haven narrative can only reactivate if the Middle East conflict worsens further.
 

III. Key Events to Watch This Week

1. Fed September policy meeting + press conference (the flagship event of Super Week). It will determine the trajectory of the US Dollar and US Treasury yields and stands as the biggest variable for gold.
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3. Real-time developments in the Middle East: Potential new attacks by the Houthis, Saudi Arabia and Iran; tanker transit conditions in the Strait of Hormuz.
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5. Remarks from OPEC+ officials and US crude inventory data.