On March 3, 2026, financial markets experienced heightened volatility driven by escalating conflict between the US and Iran, which resulted in significant movements across major asset classes [1][2]. The fourth day of the US-Iran war saw oil prices surge, with WTI crude oil rallying 4.34% to close at $73.80 per barrel, and intraday highs approaching 9%, following reports of Iranian strikes and the temporary closure of the Strait of Hormuz—a critical global energy chokepoint [1]. The oil price spike was directly linked to Iran targeting the US consulate in Dubai and the disruption of maritime trade, but President Trump’s midday announcement that the US Navy would escort tankers and provide political risk insurance helped pare some of the gains and eased risk-off sentiment in equity markets [1].
Gold also responded to the geopolitical turmoil, holding positive ground near $5,145 during the early Asian session on Thursday, supported by safe-haven demand stemming from the US–Iran conflict [2]. Despite the risk-off environment, babypips reported a historic liquidation in gold, suggesting a discrepancy in market reaction: according to [1], gold suffered a historic liquidation, while [2] states gold held gains near $5,150 amid persistent geopolitical risks. This divergence may reflect different timeframes or market interpretations [1][2].
Additional geopolitical developments included Israel launching strikes targeting military infrastructure in Tehran, and US Republicans rejecting a resolution to require President Trump to seek congressional approval for future military action against Iran [2]. The chairman of the Joint Chiefs of Staff indicated the US would begin “striking progressively deeper” into Iran, further fueling safe-haven flows [2].
On the macroeconomic front, the ISM Services PMI rose to 56.1 in February, beating expectations of 53.5 and the previous month’s 53.8, which could reinforce the US central bank’s inclination to keep interest rates higher for longer [2]. New York Fed President John Williams stated that monetary policy is well-positioned to stabilize the labor market and return inflation to 2%, with further rate cuts possible if inflation follows expected downward trends [1]. Markets largely expect the US central bank to leave interest rates unchanged until the summer, though President Trump has pushed for lower rates [2].
The US dollar emerged as one of the session’s top performers, likely benefiting from safe-haven flows [1]. Equity markets sold off sharply before recovering modestly after President Trump’s assurances regarding energy shipping lanes [1].
CONCLUSION
Escalating US-Iran tensions drove sharp moves in oil and gold, with WTI crude rallying and gold holding near record highs amid safe-haven demand, though sources differ on gold’s immediate direction. The US dollar strengthened, and equities saw volatility, as President Trump’s intervention helped ease some risk-off sentiment. Persistent geopolitical risks and strong US economic data suggest continued market uncertainty and elevated volatility.