US Treasury lifts Iran sanctions as deal hopes gain momentum

The US Treasury lifted sanctions on Iran on Wednesday, as reported by the US Treasury Department’s website. Two aircraft connected to the Islamic Revolutionary Guard Corps (IRGC) and three airlines were among the targets. This move may indicate a possible agreement between the US and Iran, as talks continue to advance. Reports also mention a finalized deal between Oman and Iran, contingent upon Tehran's consent.

Gold prices surged past the $4,200 mark, climbing nearly 4% to a 30-day high of $4,242, signaling a shift from a downward trend to a more neutral or upward trajectory. The price reached this peak by surpassing the 50-day Simple Moving Average (SMA) near $4,161, opening the door to further gains. In financial terms, "risk-on" and "risk-off" describe investor sentiment during a specific period.

In a "risk-on" market, investors are optimistic about the future and more inclined to invest in risky assets. Conversely, in a "risk-off" market, investors tend to be cautious, opting for safer, more reliable assets, such as bonds and gold. During the former, stock markets typically rise, while most commodities, except gold, also appreciate due to positive growth expectations.

The currencies of nations with significant commodity exports strengthen, and cryptocurrencies also benefit. Conversely, in a "risk-off" market, bonds gain value, especially major government bonds, while safe-haven currencies like the Japanese Yen, Swiss Franc, and US Dollar benefit. Commodity-exporting economies, such as the Australian Dollar, Canadian Dollar, New Zealand Dollar, and minor currencies like the Ruble and South African Rand, often rise in "risk-on" markets due to increased demand for raw materials.

In contrast, major currencies like the US Dollar, Japanese Yen, and Swiss Franc tend to strengthen in "risk-off" markets, primarily due to increased demand for US government debt and Japanese government bonds.