Trump Rejects Iran Deal, 3 Safe Havens Gain on War Risk

A fragile ceasefire between the United States and Iran is on the verge of collapse after President Donald Trump on Monday called Tehran’s latest proposal “totally unacceptable,” increasing the risk of open conflict in the Middle East and sending investors scrambling for safe-haven assets. The breakdown in talks immediately rippled across global markets, with oil prices rising on fears of supply disruptions.

“We’re essentially seeing an unwinding of hopes for an imminent US-Iran deal, and gold is feeling the pinch from the renewed rise in crude prices,” Tim Waterer, chief market analyst at KCM Trade, told Reuters.

The risk-off sentiment was evident as spot gold prices fell 0.6 percent to $4,684.32 per ounce, while US gold futures for June delivery lost 0.8 percent to settle at $4,692.70. In equities, Japan's Nikkei 225 Index erased earlier gains to close down 0.5 percent. The volatility has renewed interest in safe havens like the US dollar, government bonds, and specific defensive sectors.

The impasse threatens to prolong a worldwide energy crisis sparked by the conflict. Iran maintains a chokehold on the Strait of Hormuz, a vital artery for global oil shipments, while a US naval blockade has crippled Iranian port access. US Central Command reported its forces have redirected 62 commercial ships as part of the blockade. In response, Iran has reportedly deployed deep-roaming submarines in the strait, a strategic escalation.

Diplomatic Deadlock

The core of the disagreement remains Iran's nuclear program. According to reports, Iran insists the American blockade and sanctions must be lifted before it will negotiate over its stockpile of highly enriched uranium. The US and its ally Israel demand that material, which could potentially be used to build a nuclear weapon, be removed from Iran. Tehran’s state broadcaster IRIB framed the American proposal as a demand for Iran’s “surrender to Trump’s greed.”

President Trump, who had previously accused Iran of “playing games,” is expected to travel to China this week to urge President Xi Jinping to apply more pressure on Tehran. Beijing is the largest buyer of Iran's sanctioned crude oil, giving it significant economic leverage.

Market and Regional Impact

The last time a major geopolitical flare-up occurred in the Strait of Hormuz, oil prices spiked over 10 percent in a single week. The current standoff has already had significant consequences, with tensions flaring between Israel and the Lebanese militant group Hezbollah, and drone attacks targeting ships in the Gulf.

Lebanon’s President Joseph Aoun has urged the United States to pressure Israel to halt attacks in southern Lebanon, where the health ministry reports 2,869 people have been killed since the conflict began. Meanwhile, Iran has warned European countries against deploying warships to the region, stating any intervention would “bring about further complications.” For now, the diplomatic track appears frozen, with both sides digging in their heels as the global economy braces for impact.

This article is for informational purposes only and does not constitute investment advice.