US and Iran Signal Talks as Market Cools
Signs of easing have emerged in the Middle East, with the United States and Iran signaling diplomatic negotiations and cooling market fears of energy supply disruptions. According to Reuters, an Iranian delegation held consecutive days of consultations with Qatari mediators over the weekend in Doha, the capital of Qatar, seeking a solution to the eight-month-long war.
Iran's Foreign Ministry confirmed on Monday that Tehran has presented a shortened peace proposal, demanding that the United States lift the naval blockade on Iranian ports and ease restrictions on oil exports, and proposing that, upon reaching an agreement, the timeline for reopening the Strait of Hormuz be shortened from seven days to two days. Iranian President Pezeshkian revealed that Supreme Leader Mojtaba has granted the government partial negotiating authority, fueling market expectations of a diplomatic breakthrough.
US President Trump said in an Axios interview on Monday that he was in no hurry to decide whether to resume the use of force against Iran, adding that US economic pressure had severely hit Iran, talks were progressing acceptably, and Iran was more eager than before to reach a deal. According to reports, the White House is still weighing options including diplomatic negotiations, renewed military strikes, and continued economic pressure, while Qatar has proposed a draft three-day confidence-building measures proposal aimed at restoring direct US-Iran dialogue. However, Trump did not rule out resuming military action after the midterm elections or the future use of force, and the US and Iran have still not reached a substantive agreement.
Oil Falls More Than 7%, Natural Gas Plunges
On the negotiation signals, international oil prices plunged more than 7% on Monday. Brent crude futures closed at $104.77 per barrel, down 7.63%; WTI crude futures closed at $96.46, down 7.36%, falling below the $100 mark. The decline continued in early Asian trading on the 3rd, with Brent quoted at $104.32 and WTI at $96.35.
European natural gas markets were also under pressure. The Dutch TTF natural gas futures, the benchmark for European natural gas pricing, closed down 8.52% on Monday at 94.09 euros per megawatt-hour, touching an intraday low of 92.6 euros. As Europe relies heavily on LNG imports, changes in Qatari supply and shipping security in the Strait of Hormuz have a particularly pronounced impact on local gas prices. In addition, some OPEC producers decided to maintain their established December output arrangements without further cuts, leaving crude prices without additional support.
Gold Rebounds After Breaking Below $4,000
In contrast to the sharp energy selloff, international gold markets staged a rebound from deep losses. Previously weighed down by dollar moves, interest-rate expectations, and fund repositioning, gold prices broke below $4,000 per ounce and touched a one-year low, before attracting bargain-hunting investors. As falling oil prices eased inflation concerns and the dollar weakened, gold buying gradually returned.
Spot gold rebounded about 1.8% on Monday to close at $3,946.63 per ounce; in early Asian trading today it extended gains to $3,950.25 per ounce, up 0.1%. Looking ahead, markets will continue to watch whether US-Iran talks can achieve substantive progress, as well as the Federal Reserve's future interest-rate policy direction. If Middle East tensions cool further, energy prices could continue to correct; the Middle East conflict has not fully subsided, and energy facilities and maritime transport still face risks. Whether gold can retake $4,000 will depend on dollar moves, interest-rate expectations, and changes in safe-haven demand.