Global markets closed the week with one clear message: the worst panic around the Gulf conflict eased, but the market is not fully convinced that stability is back. Reuters reported that the dollar was heading for its largest weekly drop since January as investors unwound safe haven positions after this week’s ceasefire, yet traders remain focused on weekend talks between the United States and Iran in Islamabad and on whether the agreement can actually hold.
Oil stayed at the center of the story. Brent and WTI both rose on Friday as new anxiety hit the market after attacks cut Saudi Arabia’s output capacity by about 600,000 barrels per day and reduced East West Pipeline throughput by about 700,000 barrels per day. Even so, both contracts were still on track for a weekly loss of about 11% as traders balanced fragile ceasefire optimism against continuing disruption in the Strait of Hormuz, where shipping remained well below normal levels. Reuters also noted that physical crude prices in Europe and Africa hit record levels this week, showing that real supply conditions are still far tighter than the futures pullback might suggest.
In forex, the shift was just as clear. The dollar lost ground as war related fear trades reversed, with Reuters reporting the euro around $1.1694, sterling above $1.3424, and the dollar index down about 1.3% on the week. That tells traders that markets are moving from peak panic into a more conditional phase, where confidence can improve quickly if diplomacy makes progress, but can also reverse fast if weekend talks disappoint or if shipping through Hormuz stays choked.
Gold had a stronger week than many expected. Spot gold held near $4,764.54 on Friday and was on course for a 1.8% weekly gain, its third consecutive weekly rise. At the same time, Reuters noted that gold is still about 10% below where it stood when the conflict erupted on February 28, because elevated energy costs have also fed inflation fears and complicated the interest rate outlook. In other words, gold is still benefiting from uncertainty, but not in a clean straight line.
Crypto now becomes the key market to watch into the weekend because it is the major asset class that keeps trading while much of the traditional market pauses. Bitcoin is around $71,767 and Ether around $2,186. That does not guarantee the weekend move will define next week, but it does make crypto the clearest live sentiment gauge while traders wait for news from the Islamabad talks and any signs that Gulf energy flows are normalising. That is an inference, but it is well supported by this week’s pattern across currencies, oil and risk appetite.
Looking ahead, next week’s tone for forex, oil and gold is likely to depend on three things. First, whether weekend diplomacy produces something more durable than a shaky pause. Second, whether tanker traffic through Hormuz starts to recover meaningfully from levels that Reuters described as well below 10% of normal. Third, whether inflation concerns stay elevated as markets absorb the latest energy shock. If those pressures ease, the dollar could stay softer and oil could cool further. If not, volatility could return quickly across currencies, commodities and crypto alike.
