Strait of Hormuz Stalls Again, Safe-Haven Trade May Restart. Where Will Global Assets Go?

The reopening on April 17 was, in essence, a conditional arrangement. The Iranian Foreign Minister's statement explicitly limited the opening to merchant ships "during the Lebanon-Israel ceasefire," which was fundamentally a prerequisite for the ceasefire between Israel and Hezbollah and the advancement of U.S.-Iran negotiations. While a 10-day ceasefire was initiated by both sides at the time, Israel clearly stated it would not withdraw its troops from southern Lebanon, and the U.S. did not lift its maritime blockade of Iranian ports.

It was under these fragile and non-consensual conditions that the foundation for peace rapidly collapsed. The Islamic Revolutionary Guard Corps (IRGC) explicitly stated in a declaration that because the U.S. violated ceasefire commitments by failing to lift the maritime blockade on Iranian ports and vessels, the strait would be blockaded starting that evening until the U.S. lifts its blockade on Iran.

The IRGC warned that all vessels in the Persian Gulf and the Gulf of Oman are prohibited from leaving their anchorages, and any approach toward the Strait of Hormuz will be deemed "collaboration with the enemy," with violating vessels becoming targets for attack.

Earlier, the British maritime security firm Vanguard Tech reported that three vessels—including a tanker, a cruise ship, and a container ship—were attacked near the Strait of Hormuz that day, with two of them being explicitly warned and fired upon by the IRGC.

In fact, during the Friday, April 17 Asian trading session, Asia-Pacific stock markets opened lower and trended downward throughout the day, even experiencing a late-session plunge, indicating that some capital has been withdrawn to cash out, reflecting the risk of further escalation in the US-Iran conflict over the weekend.

Crude Oil: Facing Upside Risks Again After a Brief Respite

Since the outbreak of the US-Iran conflict, crude oil prices have continued to soar. On April 8, the spot Brent price surged to $144.42 per barrel, surpassing the historical high of $144.22 set in 2008.

Although WTI crude oil plummeted by more than 10% in a single day when Iran announced the opening of the strait on the morning of April 17 (EST), it announced a resumption of the blockade less than 24 hours later on April 18, putting oil prices under upward pressure again after a brief respite.

If the blockade persists, oil prices will face sustained upward pressure. As of mid-April, more than 400 tankers were stranded inside and outside the Persian Gulf. Morgan Stanley noted that the damage caused by the conflict to the energy system has exceeded "logistics disruption," and the material damage to production capacity means that the energy price center has been permanently elevated.

Gold and Silver: Safe-Haven Logic Partially Fails, Rate Cut Expectations Remain the Main Narrative

Since the conflict broke out in late February, gold once dropped from $5,400 to $4,100. This trend in precious metals suggests that the safe-haven logic has partially failed, turning instead to being more influenced by the transmission of global inflation expectations.

Driven by skyrocketing oil prices, inflation expectations soared, and expectations for a Fed rate cut were sharply weakened, even triggering market concerns about rate hikes at one point. This sentiment once suppressed the valuation of non-interest-bearing assets like gold and silver.

After Iran announced the opening of the strait on April 17, gold surged nearly 3% in a single day, breaking through $4,800, which was the result of this transmission chain operating in reverse. State Street Global Advisors analysts previously noted that if oil prices normalize to the $80-$85 per barrel range, gold prices are expected to be "quickly pushed back above $5,000."

A Kitco survey showed that 80% of Wall Street analysts are bullish on gold prices for next week, with none expecting them to remain flat. However, gold is not entirely without risk. With the strait closing again on the evening of April 18, should oil prices surge once more, gold will again face pressure from the disappearance of rate cut expectations caused by inflation expectations. This also explains why profit-taking emerged as gold prices approached the $4,900 mark on April 17, ultimately falling back to $4,829, as the market continues to bet on the reality that "peace may only be fleeting."

US Stocks, the US Dollar, and Treasuries: A "Long-Short Tug-of-War"

A BofA fund manager survey showed that while market sentiment reached its most pessimistic level in nearly a year, 70% of respondents do not expect a recession. Investors have not engaged in frantic cash accumulation, with cash holdings still at 4.3%, well below historical panic highs.

Joe Seydl, senior markets economist at JPMorgan Private Bank, explained: "The stock market is not pricing in what is happening now; it is always pricing in a picture of the world 6 to 12 months in the future." This implies that as long as the market believes the blockade of Hormuz will eventually be lifted, US stocks have the capacity to maintain resilience amid short-term volatility.

Furthermore, influenced by rising ceasefire sentiment this month, the US Dollar Index erased all gains brought about by the conflict in Iran, retreating significantly from the 10-month high reached in late March. If the escalation of the blockade on April 18 pushes oil prices higher again, the US dollar, as the market's current sole safe-haven asset and in demand for liquidity, may be expected to regain its upward momentum.

Regarding Treasury yields, the 10-year US Treasury yield fell to 4.23% on April 17, its lowest level since early March. If oil prices rebound due to the continued blockade, Treasury yields will face upward pressure again, further squeezing the valuation space for high-valuation sectors such as technology.

Crypto Assets Enter a Moment of High Volatility

While crypto assets led by Bitcoin have continued to rise recently, they are accompanied by high volatility. As a high-beta risk asset, Bitcoin performed sluggishly in 2026, rebounding slightly after touching the $60,000 mark but generally remaining in a range-bound oscillation. During this period, driven by rebound demand and recovery, Bitcoin successively broke through the $75,000 and $78,000 levels.

As of April 17, the funding rate for Bitcoin perpetual contracts has remained negative for approximately 46 consecutive days, marking the longest bearish streak since the FTX collapse in 2022. This means that leveraged traders are still willing to pay to maintain short positions even as spot prices edge higher.

Bloomberg previously reported that Bitcoin is currently facing a "credibility" test—the divergence between spot trends and derivative positions is one of the largest gaps so far this year. Vetle Lunde, head of research at K33 Research, stated that traders are actively building short positions, betting that Bitcoin will fail to break through. If upward momentum continues, the likelihood of a short squeeze will increase.

This implies that every Bitcoin breakout is met with a higher proportion of short positions rather than stop-losses on those positions, which also means that high-volatility, continuous oscillation may be the "main theme" of the crypto market.

Judging by the current stances expressed by the U.S. and Iran, their demands are highly polarized, making a swift resolution difficult to achieve. However, a full-scale escalation is also unlikely to occur; this round of conflict is more a game of attrition.

TradingKey believes that the greatest tail risk stems from Israel. The objectives of the U.S. and Israel are not entirely aligned, and Israel has a strong incentive for a unilateral escalation of hostilities, making it the most difficult variable to manage in this game. For investors, several key signals require continuous monitoring:

Traffic volume through the Strait of Hormuz. UBS warns that even if the strait reopens, energy prices may remain elevated for a longer duration, with oil prices potentially reaching $130 per barrel in an extreme scenario. This will determine the duration of the "inflation shock."

Shifts in rhetoric from Federal Reserve officials. Year-on-year CPI in March jumped from 2.4% to 3.3%. If oil prices climb again due to a sustained blockade, the room for Fed rate cuts will be further compressed, potentially even necessitating a discussion on rate hikes. The FOMC meeting at the end of April will be a critical observation window.

Implementation of the Lebanon-Israel ceasefire. The 10-day ceasefire initiated on April 16 is a prerequisite for the potential reopening of the Strait of Hormuz. However, the misalignment between Israel's stance that it "will not withdraw troops from southern Lebanon" and Iran's demand for a "comprehensive ceasefire" represents the greatest uncertainty over the next two weeks.

This content was translated using AI and reviewed for clarity. It is for informational purposes only.