Relief in financial markets after Iran ceasefire – but it is far from absolute | Richard Partington

The Iran ceasefire has triggered a sharp relief move across risk assets, with Brent crude falling more than 10% on Wednesday, but the shock to inflation and growth is not gone. Brent is still above $90/bbl versus below $73 before the war, and Capital Economics still sees oil ending 2026 around $80/bbl, implying US and Europe headline inflation could stay in the 3-4% y/y range while growth slows. The key market issue is not just the ceasefire itself but the durability of any reopening of the Strait of Hormuz, through which a fifth of global oil and gas supplies flow. The article stresses conflicting signals from Tehran and Washington, continued strikes in Lebanon, and the risk that damaged energy infrastructure and disrupted shipping cannot be repaired quickly, leaving a lingering geopolitical risk premium. For precious metals, the setup is modestly supportive for gold as long as Middle East uncertainty, elevated oil, and sticky inflation expectations persist. The immediate risk is a further de-escalation-driven squeeze in safe-haven demand, but the bigger near-term catalyst is whether the ceasefire holds and whether energy prices keep retracing toward prewar levels; if not, inflation hedging and geopolitical bid should remain in place.