Oil heads for weekly gain while gold and Bitcoin jump on US Treasury buyback plans

Oil prices were poised for a weekly increase, while gold and Bitcoin experienced significant gains on Friday, driven by Iran war uncertainty and a US plan to double its bond buyback program. Crude prices dipped on Friday but remained on track for a second consecutive weekly rise after the US threatened Iran with its "toughest sanctions" yet.

Brent crude, the benchmark for two-thirds of the world's oil, rose 0.25% to $94.01 a barrel, while West Texas Intermediate added 0.37% to $87.15 per barrel. Prices had surged by 3% on Thursday following the US announcement of stricter economic pressure on Iran. Since last week's closing, Brent is up nearly 5.5%, with WTI up almost 5% over the same period.

US Treasury Secretary Scott Bessent announced that Washington would impose even more stringent sanctions on Tehran to break the deadlock in negotiations. The two sides had agreed to a two-month ceasefire in June to pave the way for ending the conflict, but it unraveled, and the US intensified its pressure on Iran's faltering economy. Bessent planned to hold a news conference on Monday to detail the US measures. US President Donald Trump warned of "tremendous economic consequences" for countries engaged with Iran.

The US actions heightened the risk of tighter restrictions on Iranian oil shipments, shipping routes, and counterparts, said Naeem Aslam, chief information officer of London-based Zaye Capital Markets. Iran's central bank governor, Abdolnaser Hemmati, stated that the country was not exporting any oil. Iran is also grappling with runaway inflation and a weakening currency.

The Tehran regime has endured sanctions for decades, with over 6,000 sanctions in place across various sectors. Disruptions in oil flows through the Strait of Hormuz and constrained Middle Eastern supply and refined product availability are increasing concerns in the crude market.

Gold and Bitcoin surged on the same day. Gold, seen as a safe haven against inflation, rose 1.87% to $4,597.83 per ounce, on track for a 5% weekly gain. The US Treasury doubled its repurchase of long-dated securities to at least $4 billion per round over the next quarter, with Bessent hinting at further increases. Gold also benefitted from softer short-term monetary policy expectations, as markets anticipated the US Federal Reserve maintaining interest rates at its September meeting.

Bitcoin, the world's leading cryptocurrency, jumped 8% to $77,433.36, marking nearly a 24% weekly increase. Lower Treasury yields and a weaker dollar support the assets by reducing the allure of cash and fixed-income investments, while a potential rise in long-term yields could pressure Bitcoin and other high-beta assets.