Hormuz pushed oil to $110; sanction waiver pulls it back as gold holds above $4,150

Flames in the Strait of Hormuz drove oil to five-month highs on Friday, with Brent touching $110 intraday; the narrative flipped on Monday as news of a US sanctions waiver on Russia pulled crude lower, while gold steadied above $4,150, caught between rate-hike bets and geopolitical haven demand^[1][2][3].

Friday: strait jitters send oil to $110

At Friday's close, Brent settled at $109.93 a barrel, up $4.01 or 3.78% on the day, trading a $104.91–$110.00 range and touching the $110 mark intraday; WTI closed at $101.85, up $3.88 or 3.96%^[1]. The driver was a sharp escalation in supply-disruption risk: Iran's Revolutionary Guards confirmed two tankers struck mines and caught fire in the strait, Tehran vowed to keep the waterway closed, and attacks on shipping since the war began hit a record; the same day, US Strategic Petroleum Reserve inventories were revealed to be at their lowest since 1983, with the Energy Department seeking to release up to 17 million barrels via exchange^[1]. On the bullion side, spot gold in London closed Friday at $4,164.05 an ounce, down 0.16%, after an intraday range of $4,147.23–$4,198.54; silver finished at $56.94, down 0.78%^[1].

Monday: sanction waiver drags oil lower

Heading into Monday's Asian session, the story turned. Per Bloomberg, US President Donald Trump said he had struck a diesel export deal with Russia and waived numerous sanctions, arguing he did not want to push Vladimir Putin away from Ukraine peace talks; WTI subsequently slid toward $97.50 as traders weighed the prospect of more Russian fuel supply^[3][4]. Brent fell in tandem, down 1.7% to around $108 a barrel and off five-month highs, as the market balanced escalating geopolitics against regional supply nearing pre-war levels^[2]. The risk has not gone away: on Sunday the IRGC reported another tanker struck a mine and exploded in the southern strait, Saudi civil defence briefly issued a "potential danger" alert for Abha City, and Houthi spokesperson Yahya Saree said Saudi warplanes had carried out 110 air strikes and missile attacks over the past 24 hours on Sanaa and other governorates^[5]. Separately, Iran was reported to be urging the US to accept a proposal to reopen the Strait of Hormuz^[6].

Gold: a tug-of-war above $4,150

Gold drifted higher to around $4,175 in early Asian trading on Monday. Despite hotter-than-expected US inflation, rate pricing has shifted: Fed Chair Kevin Warsh voiced optimism about US economic strength but offered no clues on the rate path; traders broadly expect a hold in October while pricing a 91.8% probability of a December hike, per CME's FedWatch tool^[3]. Gerald Gan, chief investment officer at Reed Capital Partners, said: "While inflation remains a concern and further tightening cannot be ruled out, Warsh's latest tone suggests little urgency to deliver consecutive rate hikes"^[3]. Technically, Friday's $4,198.54 high and the $4,200 round number cap the upside, while $4,147.23 (Friday's low) and $4,100 underpin; the direction of Monday's gap is worth watching.

Domestic market and FX: positive SHFE premium, stronger fix

Onshore, SHFE gold 99 closed Friday's night session at 899.00 yuan/gram, down 0.29%; against spot gold at $4,164.05 and onshore USDCNY at 6.6870, the SHFE-London premium works out to about +0.42%, a positive reading that points to mildly firm Chinese physical demand^[1]. On FX, the central parity rate was set at 6.7208 per dollar on October 19, 12 basis points stronger than the previous fixing^[7]. The dollar index closed Friday at 101.78, down 0.06%, while the 10-year Treasury yield held at an elevated 5.098% — a high-rate environment that continues to weigh on non-yielding assets^[1].

What to watch

First, marginal changes in Hormuz transit and the US-Iran standoff — Iran's "new operational plan" rhetoric and progress on the reopening proposal will move oil directly. Second, the actual increment in Russian fuel exports under the waiver. Third, gold's battle with the $4,200 resistance and whether December hike bets (now 91.8%) heat up or cool down. Fourth, this week's packed run of central bank meetings and US earnings as a transmission channel for risk appetite.