Sources: US, Iran discuss phased Hormuz Strait reopening in exchange for sanctions relief

U.S. Stock Market Closes Mixed

In early trading on September 25, the Nasdaq and S&P 500, which had been declining, suddenly rebounded sharply. By the close, the three major U.S. stock indexes ended mixed:

• Dow Jones Industrial Average: -0.31%
• S&P 500: -0.02%
• Nasdaq: +0.01%

Strait of Hormuz: Positive Developments

According to media reports citing "two Iranian sources, two regional officials, and two Western diplomatic sources," representatives from the U.S. and Iran are discussing a plan to gradually end hostilities. Under the proposed framework:

• Iran would reopen the Strait of Hormuz
• The U.S. would lift its economic blockade on Iran

Regional sources indicated that, given the urgency of lifting the blockade, Iran is willing to move its demand for transit fees through the Strait of Hormuz out of the main agreement and into an annex. However, the source noted that any such arrangement would be temporary and would not represent Iran formally abandoning its established position.

The report also highlighted significant obstacles to negotiations, with both sides reluctant to give up their leverage and lacking mutual trust to reach an agreement.

Oil Market Impact

International oil prices experienced sharp intraday volatility. Final settlements:

• WTI crude oil futures: +2.66%
• Brent crude oil futures: +3.58%

Two Additional Oil Market Stories

1. France Plans G7 Meeting on Strategic Petroleum Reserves

French President Emmanuel Macron said in a joint interview with two French TV stations on the evening of September 24 that France intends to convene G7 member states to discuss releasing strategic petroleum reserves in order to stabilize international oil prices.

2. Saudi Arabia's July Oil Exports Hit New Low

Data released by the Saudi General Authority for Statistics on September 24 showed that Saudi Arabia's oil exports and total exports both continued to decline in July, reaching their lowest levels since May 2025 and June 2021, respectively.

Key figures (via Russian News Agency):

• July oil exports: 598.88 billion Saudi riyals (~$15.9 billion), down 12.8% year-on-year — lowest since May 2025
• Total merchandise exports: 843.79 billion riyals (~$22.4 billion), down 17.2% year-on-year — lowest since June 2021
• Oil's share of total exports: Fell to 71% in July, from 71.7% in June

Fed Officials Strike Hawkish Tone

On Thursday, three Federal Reserve officials delivered hawkish remarks:

• Philadelphia Fed President Anna Paulson: Clearly stated that if the economy evolves as expected, "modest further tightening" may be necessary.
• New York Fed President John Williams: Said another rate hike by year-end is "reasonable" and that more effort is needed to reduce inflation.
• Cleveland Fed President Beth Hammack: Emphasized that in a persistently high-inflation environment, successive external shocks significantly increase the risk of inflation expectations becoming unanchored.

These comments align with the Fed's stance from last week's meeting, where the FOMC unanimously agreed to raise rates by 25 basis points and projected at least one more rate hike this year.

Market impact: The probability of a Fed rate hike in October has risen from 53% last weekend to approximately 69% currently, driven by both the officials' remarks and recent strong economic data. The next Fed policy meeting concludes on October 28.

Houthi Rebels Claim Attack on Saudi Capital

According to CCTV News, on the evening of September 24, Houthi military spokesman Yahya Saree issued a video statement claiming the group had used multiple ballistic missiles, cruise missiles, and drones to attack a "sensitive target" in Riyadh, as well as Saudi Aramco facilities in the Red Sea coastal city of Yanbu.

Earlier, Saudi Arabia stated it had intercepted six ballistic missiles fired by the Houthis toward Taif and Yanbu in the south, but did not confirm an attack on Riyadh or any casualties or property damage in Taif and Yanbu.

Saree also issued an earlier statement claiming the Houthis had launched a large-scale attack using dozens of ballistic missiles and drones against multiple military targets in the Jizan region of southwestern Saudi Arabia.

Gold Market: Short-Term Pressure vs. Long-Term Optimism

On the last trading day before the Mid-Autumn Festival, the precious metals market faced downward pressure.

Analyst Commentary:

Chen Mengyun, Analyst at Shenyin & Wanguo Futures, attributed the recent weakness in precious metals to rising Fed rate hike expectations. Following the Fed's hawkish September meeting, rate hike expectations increased, and stronger-than-expected U.S. economic data further fueled those expectations. Key data points:

• U.S. Services PMI: Rose to 58.7, well above the expected 55.8 — highest since 2021
• U.S. Manufacturing PMI: Rose to 57.0 — highest since 2022
• U.S. Composite PMI: Rose to 58.4 — highest since July 2021

These figures indicate strong underlying momentum in the U.S. economy.

Geopolitical context: U.S.-Iran negotiations remain deadlocked. According to Xinhua News Agency, during the UN General Assembly debate, Iran held talks with the U.S. through mediators and conveyed conditions for reopening the Strait of Hormuz. Iran took a强硬 stance, stating it "will not kneel," while the U.S. Secretary of State said the Trump administration has multiple options, including military ones.

Chen noted: "Renewed concerns over oil supply have pushed up prices, marginally increasing inflationary pressure. October rate hike expectations have rapidly risen, driving U.S. bond yields and real interest rates higher. As a non-yielding asset, gold is highly negatively correlated with real interest rates. Rising rates directly increase the holding cost of gold, suppressing precious metals valuations and driving gold prices lower."

Outlook:

Some analysts believe that short-term pressure on gold prices coexists with medium-to-long-term upside potential.

Zhan Dapeng, Director of Research at Everbright Futures Research Institute, noted that rising energy costs are currently the main driver of inflation, but oil prices are unlikely to sustain their rally. If energy prices are effectively controlled, the Fed's willingness to continue raising rates may decline, making sustained weakness in gold prices less likely.

Chen added that before Fed rate hike expectations cool substantially, gold's rebound potential is limited, and prices are likely to remain range-bound. A trend-driven rally would require signals such as declining rate hike expectations, further fiscal risk materialization, and sustained return of institutional capital.

Long-term view: "The foundation for gold's upward trend has not been shaken," Chen said. Key supporting factors include:

• Ongoing de-dollarization driven by repricing of U.S. dollar credit
• Sustained central bank gold purchases — China's central bank has increased its gold reserves for 22 consecutive months
• Clear trend toward reserve diversification
• Repeated geopolitical risks
• Potential return of ETF capital inflows

These factors provide solid support for gold prices, with the medium-to-long-term price center likely to rise further.

(Source: Futures Daily)