Blog

Gold prices declined on Wednesday after U.S. President Donald Trump said the interim peace framework between the United States and Iran had effectively come to an end, prompting a rally in oil prices and renewing concerns over global inflation.

By 09:36 GMT, spot gold had fallen 1.2% to $4,057.09 an ounce, while gold futures were down 2.2% at $4,066.56 an ounce.

Geopolitical Tensions Pressure Bullion

Speaking during the NATO summit in Turkey, Trump questioned Iran’s commitment to the agreement and suggested diplomatic efforts had failed.

“We make a deal, and everyone’s agreed. No nuclear weapons. We make a deal. They go outside, talk to the press, they say we never even talked about it. There’s something wrong with them. They’re cuckoo. As far as I’m concerned, it’s over,” Trump said.

Earlier in the day, Iran said it had launched attacks on U.S. military facilities in Kuwait and Bahrain in response to American military operations inside Iran and Washington’s decision to withdraw a sanctions waiver on Iranian oil exports.

Iran’s Islamic Revolutionary Guard Corps said it had struck 85 U.S. military targets and shot down an MQ-9 drone. Meanwhile, the Pentagon said U.S. forces had carried out strikes against more than 80 targets in Iran and over 60 IRGC vessels following attacks on commercial shipping in the Strait of Hormuz.

Although Iran has not claimed responsibility for Tuesday’s attacks on commercial vessels near Oman, the renewed conflict has unsettled financial markets.

Inflation Outlook Takes Centre Stage

The rebound in crude oil prices has revived concerns that higher energy costs could feed into inflation, potentially influencing future monetary policy decisions.

According to Britannia Global Markets, expectations of another Federal Reserve rate increase had eased following weaker U.S. employment data last week but have strengthened again as geopolitical tensions intensified.

Higher interest rates generally reduce demand for non-yielding assets such as gold, while a stronger U.S. dollar can also limit buying interest by making bullion more expensive internationally.

Investors Await Fed Minutes

Market participants are now focused on the publication of the Federal Reserve’s June meeting minutes.

Although policymakers left interest rates unchanged at 3.5% to 3.75%, several members projected that additional rate increases may be appropriate during 2026.

Crude oil prices surged on Wednesday after U.S. President Donald Trump said the interim agreement between the United States and Iran was effectively finished, reigniting concerns over energy supplies from the Middle East.

By 08:46 GMT, Brent crude had climbed 5.5% to $78.24 a barrel, while U.S. West Texas Intermediate (WTI) gained 2.9% to $72.49 a barrel.

Fresh Middle East Tensions Lift Crude

During the NATO summit in Turkey, Trump accused Iran of failing to honour the agreement and suggested diplomatic efforts had reached an end.

“We make a deal, and everyone’s agreed. No nuclear weapons. We make a deal. They go outside, talk to the press, they say we never even talked about it. There’s something wrong with them. They’re cuckoo. As far as I’m concerned, it’s over,” Trump said.

Earlier in the day, Iranian officials said military strikes had been carried out against U.S. facilities in Kuwait and Bahrain in response to recent American operations inside Iran and Washington’s withdrawal of a sanctions waiver covering Iranian oil exports.

Iran’s Islamic Revolutionary Guard Corps claimed it had targeted 85 U.S. military sites and downed an MQ-9 drone. Meanwhile, the Pentagon said American forces had struck more than 80 locations inside Iran and over 60 IRGC vessels after attacks on commercial shipping in the Strait of Hormuz.

Washington also withdrew an important exemption that had allowed Iran to continue selling oil on international markets, increasing expectations of tighter crude supplies.

Strait of Hormuz Back in the Spotlight

Oil markets had stabilised in June after the United States and Iran agreed to a temporary peace framework that helped restore shipping through the Strait of Hormuz, a route responsible for around 20% of global oil and LNG trade.

The latest military escalation has cast doubt over the future of that agreement and raised fresh uncertainty about any long-term diplomatic settlement.

“A return to full-scale U.S.-Iran conflict appears unlikely given growing U.S. political pressure to keep oil prices contained ahead of the November midterm elections. However, there is still no clear path to fully securing the Strait of Hormuz,” OCBC analysts wrote in a note.

Supply Data Remains in Focus

Although geopolitical developments dominated trading, investors also continued to assess the impact of OPEC+’s latest decision to increase production.

Attention is also turning to official U.S. oil inventory figures due later in the day after recent disruptions linked to the conflict.

The American Petroleum Institute reported that U.S. crude inventories declined by 399,000 barrels last week, a smaller draw than expected.

European equity markets fell sharply on Wednesday afternoon after U.S. President Donald Trump said the framework agreement that had supported a ceasefire with Iran was effectively finished, triggering a broad risk-off move across global markets.

The pan-European STOXX 600 index, which had been down around 0.4% earlier in the session, extended its losses to 1.7% as investor confidence deteriorated. The comments weakened expectations of a diplomatic resolution to the conflict and prompted a widespread sell-off across European equities.

Trump Says Ceasefire Framework Is “Over”

Speaking during the NATO summit in Ankara, President Trump dismissed the future of the Islamabad Memorandum of Understanding (MoU), the agreement that had underpinned a fragile 60-day ceasefire introduced in June.

“We make a deal, and everyone’s agreed. No nuclear weapons. We make a deal. They go outside, talk to the press, they say we never even talked about it. There’s something wrong with them. They’re cuckoo. As far as I’m concerned, it’s over,” Trump said.

The apparent collapse of the agreement has renewed concerns that shipping through the Strait of Hormuz could once again face significant disruption, increasing uncertainty for global energy markets and international trade.

Germany’s DAX declined 2.4%, France’s CAC 40 fell 2.2%, while London’s FTSE 100 and Italy’s FTSE MIB both dropped more than 1.5%.

Oil Prices Jump as Geopolitical Risks Return

Energy markets reacted strongly to the latest developments, with Brent crude futures climbing 5.4% after already posting gains earlier in the trading session.

The renewed tensions have prompted traders to factor a greater risk of supply disruptions into oil prices, reversing recent expectations that geopolitical pressures on global energy supplies were easing.

Markets Await Federal Reserve Minutes

Investor attention is also focused on the release of the U.S. Federal Reserve’s June meeting minutes later in the day.

The minutes will provide the first detailed insight into policy discussions under the central bank’s new chairman, Kevin Warsh. Markets are closely watching for indications of how the Federal Reserve intends to communicate its monetary policy following Warsh’s comments favouring a less guidance-driven approach.

With several policymakers having recently indicated they remain open to further interest rate increases if inflation remains elevated, any unexpectedly hawkish tone in the minutes could influence expectations for global monetary policy.

Among individual stocks, energy producers benefited from the surge in oil prices, with Shell (LSE:SHEL) rising 1.6% and BP (LSE:BP.) gaining 2.3%.

European wholesale natural gas prices climbed sharply on Wednesday as renewed military tensions between the United States and Iran heightened concerns over the security of global liquefied natural gas (LNG) shipping routes.

Although Europe entered the summer gas storage season with comparatively healthy inventory levels, the growing risk of prolonged disruption to shipping through the Middle East has prompted traders to reprice supply risks, adding a significant geopolitical premium to the market.

Dutch and UK Gas Benchmarks Rally

The Dutch TTF benchmark gas contract rose 3% to 47.9 euros per megawatt-hour (MWh), while the front-month UK natural gas contract climbed 5.4% to 116.59 pence per therm.

The latest gains followed a sharp escalation in the Persian Gulf after reports that Iranian forces targeted commercial vessels passing through the Strait of Hormuz. In response, the United States launched additional military strikes against Iran and withdrew key oil export concessions.

LNG Supply Risks Back in Focus

The Strait of Hormuz is responsible for transporting around 20% of global seaborne LNG supplies and serves as the main export route for major producers including Qatar and the United Arab Emirates. Any disruption to shipping through the waterway could significantly reduce spot LNG availability at a time when European and Asian buyers are competing for cargoes.

Higher gas prices could also have wider economic implications. Natural gas remains a key fuel for electricity generation and an essential feedstock for nitrogen fertiliser production across Europe. A sustained increase in wholesale gas prices therefore has the potential to feed into broader eurozone inflation, adding further challenges for policymakers.

SEGRO plc (LSE:SGRO) released its trading update for the first six months of 2026 on Wednesday, reporting £53 million of new headline rent contracted during the period.

Leasing Activity and Developments Drive Rental Growth

The industrial property specialist generated £27 million of new headline rent from its existing portfolio through leasing vacant space and capturing rental reversions. A further £26 million came from development lettings, including £24 million from new pre-let agreements signed during the first half.

The company also continued to benefit from strong rental growth across its portfolio. Rent reviews, renewals and regears delivered a 44% uplift in the UK, while the group-wide increase was 32%. In Continental Europe, rental uplifts averaged 4%.

Occupancy at the end of the period stood at 94.5%, slightly below the level reported at the end of 2025, reflecting the completion of speculative developments within SEGRO’s urban logistics portfolio in Germany.

Development Pipeline and Capital Allocation

SEGRO said it now has a record pipeline of developments either under construction or in advanced negotiations, representing potential annual rental income of £90 million. Around 75% of this pipeline is supported by pre-let agreements.

The company narrowed its 2026 capital expenditure guidance to between £500 million and £550 million, towards the upper end of its previous forecast range.

During the first half, SEGRO completed £213 million of property disposals at prices above book value, representing £10 million of associated rental income. It has also exchanged contracts on a further £95 million of disposals that are expected to complete before the end of 2026.

Balance Sheet and Data Centre Expansion

The EPRA cost ratio, excluding share-based payments, improved to below 18%, compared with 19.8% at the end of 2025.

Pro forma adjusted net asset value stood at 905 pence per share, marginally lower than at 31 December 2025 due to revised yield assumptions applied by the company’s new UK property valuer for selected urban assets.

SEGRO also continued to expand its data centre strategy, adding 0.5GVA to its strategic power bank, signing a second fully fitted joint venture with Pure DC and progressing discussions on its first fully fitted data centre lease at Park Royal in London.

The company is scheduled to publish its half-year 2026 results on 30 July.

Senior Plc (LSE:SNR) said on Wednesday that it now expects full-year trading to exceed the board’s expectations outlined in its April 2026 trading update, following continued strong performance during the first half of the year.

Strong Performance Across Key Divisions

In a post-close trading update covering the six months ended 30 June, the engineering group said it has “continued to see positive momentum” since releasing its April trading update. Senior attributed the improved outlook to the ongoing strength of its Aerospace and Flexonics businesses, which have continued to perform well.

The company noted that it assesses its financial performance on an adjusted basis, excluding items that it believes do not reflect the underlying trading performance of the business during the reporting period.

Foreign Exchange Assumptions Remain Unchanged

Senior also confirmed that its primary foreign exchange exposure remains the U.S. dollar. For the 2026 financial year, the company continues to use a planning assumption of US$1.35 to the pound sterling for the exchange rate.

Half-Year Results Due in August

The group is scheduled to publish its results for the six months ended 30 June on Monday, 3 August.

Tungsten West (LSE:TUN) has confirmed that phased commissioning of the Hemerdon tungsten and tin mine will begin later this month, keeping the project on schedule in line with previously announced plans. Ahead of the production restart, the company has launched an expanded engagement programme with local communities and regulators to provide updates on the timing, scope and phased approach to the commissioning process.

The recommissioning programme will start with the fines gravity circuit and downstream processing facilities during the third quarter of 2026, followed by the coarse gravity circuit in the fourth quarter. Full project commissioning remains targeted for the first quarter of 2027, with management expecting the redevelopment to be completed within budget. As preparations continue, Tungsten West has recruited more than 100 employees and expects its workforce to grow to around 350 people by early 2027, highlighting the project’s increasing operational readiness and contribution to the local economy.

Despite continued operational progress, Tungsten West’s investment outlook remains constrained by ongoing losses, negative cash flow, increased debt and negative shareholders’ equity reported for the 2025 financial year. While recent share price momentum has been encouraging, the company’s valuation continues to reflect its loss-making position, with a negative price-to-earnings ratio and no dividend support.

More about Tungsten West Plc

Tungsten West Plc is a UK mining company focused on restarting production at the Hemerdon tungsten and tin mine in Devon. The project is intended to re-establish one of the world’s largest tungsten resources as a significant domestic supplier of strategically important metals. Alongside the mine’s redevelopment, the company is committed to working closely with local communities and building a predominantly local workforce to support long-term operations.