Bitcoin jumped to its highest level in a month, exceeding $74,000 on Tuesday, recovering from weekend losses, supported by improved risk appetite and falling oil prices, which supported the broader financial markets.

The world's largest digital currency was trading up 4.7% at $74,193.7 by 01:58 AM US Eastern Time, approaching mid-March levels again, before the escalation of the conflict with Iran.

This rise came amid a broader rally in high-risk assets, as U.S. stocks recorded strong gains on Monday, with the S&P 500 rising by more than 1%, while the Nasdaq climbed as investors flocked to technology stocks supported by continued optimism regarding AI demand.

Asian markets also rose in early Tuesday trading, in a sign of improving overall investor sentiment globally.

Cryptocurrency markets received additional support from oil prices falling below $100 per barrel after a sharp rally, which boosted demand for high-risk assets.

Signs of continuing diplomatic channels between the United States and Iran also contributed to calming the markets, despite the failure of weekend talks to achieve a breakthrough. Reports indicated that both sides are considering holding a new round of talks in the coming days, aimed at extending the fragile ceasefire.

This diplomatic movement comes at a time when tensions remain high, with the United States imposing a naval blockade on Iranian ports and Tehran warning of a response.

Short covering operations also contributed to supporting the rise, as traders closed their bearish bets as prices rose, which reinforced the upward momentum.

In a related context, Nasdaq-listed company MicroStrategy (MSTR) announced that it purchased 13,927 Bitcoin units worth approximately $1 billion over the past week, funded partly by the sale of preferred shares.

The company explained that it sold about 10.03 million shares of its variable-yield Class A perpetual preferred stock, achieving net proceeds of approximately $1 billion, which were used to purchase Bitcoin at an average price of about $71,902 per unit.

After this transaction, the company's holdings rose to 780,897 Bitcoin, at a total cost of $59.02 billion.

Regarding other digital currencies, Ethereum, the second largest cryptocurrency, recorded a jump of 8% to reach $2,361.92, while Ripple rose by 3.6% to $1.36.

Oil prices declined on Tuesday as signs appeared of the possibility of resuming talks to end the war between the United States, Israel, and Iran, which eased concerns of supply shortages resulting from the blockade imposed on the Strait of Hormuz.

Brent crude contracts fell by 64 cents, or about 0.6%, to $98.72 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped by $2.43, or 2.5%, to $96.65 per barrel.

Both benchmarks had recorded gains in the previous session, as Brent rose by more than 4% and WTI by about 3%, following the U.S. military's start of a blockade on Iranian ports. Oil prices have also jumped by about 50% during the last month, which is a record level.

Tamas Varga, an analyst at PVM Oil Associates, said that talk of resuming negotiations between Washington and Tehran pushed prices downward, but it ignored the loss of physical quantities of oil that are no longer reaching markets.

The International Energy Agency reported that attacks on energy infrastructure in the Middle East and the effective closure of the Strait of Hormuz by Iran have led to the largest disruption of oil supplies in history, with the loss of about 10.1 million barrels per day in March.

The agency emphasized that the resumption of oil flows through the Strait of Hormuz remains the most important factor in easing pressures on supplies, prices, and the global economy.

The U.S. military announced on Monday that the scope of the blockade would extend eastward to the Gulf of Oman and the Arabian Sea, while ship tracking data showed that two tankers changed their courses when the implementation of the blockade began. In contrast, NATO countries, including Britain and France, refrained from participating in the blockade, calling for the reopening of the waterway.

Iran responded by threatening to target ports of countries bordering the Gulf after the collapse of weekend talks in Islamabad, which were aimed at resolving the crisis of the Strait through which about one-fifth of global oil and liquefied natural gas supplies pass in normal conditions.

Despite this, shipping data showed that three Iran-linked tankers entered the Gulf and were allowed to pass since their destinations were not Iranian ports.

In a related context, sources reported that U.S. and Iranian negotiating teams may return to Islamabad later this week, while a U.S. official confirmed that efforts to reach an agreement continue, and Pakistani Prime Minister Shehbaz Sharif indicated that endeavors are still ongoing.

Varga added that in the event of the failure of talks, a return of prices to the peak levels recorded in March cannot be ruled out, especially with the possibility of the continued decline in global oil inventories during the third quarter and beyond.

In its forecasts, the International Energy Agency sharply lowered its estimates for global oil supply and demand growth, expecting demand to fall by about 80,000 barrels per day in 2026, and supplies to decline by 1.5 million barrels per day in the same year.

On the other hand, Russian petroleum product exports from the Black Sea port of Tuapse for April were revised upward by about 60% to reach 1.27 million tons, compared with 794,000 tons in the initial plan, according to trade data and Reuters calculations. Rosneft also diverted supplies to the refinery from the port of Novorossiysk after the terminal sustained damage.

In the United States, the average spending of truck fleets on diesel fuel reached $5.52 per gallon on Monday, exceeding the previous record of $5.50 recorded in June 2022 following the Russian invasion of Ukraine, in an indicator reflecting the growing pressures on the economy, especially since the transportation sector relies heavily on small businesses.

The U.S. dollar declined on Tuesday, heading toward recording its seventh consecutive daily loss, as investor hopes increase for reaching a diplomatic solution to the conflict in the Middle East, despite the U.S. military beginning the implementation of a blockade on Iranian ports.

The dollar index, which measures the performance of the American currency against a basket of six major currencies, fell by 0.28% to 98.061, to trade near its weakest levels since March 2, which was the first trading day after the outbreak of the war between the United States, Israel, and Iran.

If this trend continues, this will be the longest daily losing streak for the index since December, when investors were betting on a year witnessing a cut in U.S. interest rates and general weakness in the global reserve currency.

Five sources reported on Tuesday that negotiating teams from the United States and Iran may return to Islamabad later this week, after the highest level of talks between the two countries in decades ended during the weekend without achieving a breakthrough.

U.S. President Donald Trump said that Iran reached out on Monday and expressed its desire to reach an agreement, but he stressed that he would not agree to any deal that allows Tehran to possess a nuclear weapon.

Blockade increases Strait of Hormuz disruptions

At the same time, the blockade imposed by the U.S. military on Iranian ports sparked anger in Tehran and increased uncertainty regarding the reopening of the Strait of Hormuz, which is a vital corridor for shipping a large percentage of the world's oil and gas.

The closure of the Strait led to a rise in dollar-denominated oil prices, which had a supporting effect on the movements of the American currency.

Nick Rees, head of macroeconomic research at Monex Europe, said that the risk factor remains the main driver for markets, explaining that markets have become, on one hand, less responsive to economic data that previously moved them strongly, and on the other hand, more sensitive to rumors and developments coming from the Middle East, especially regarding the possibility of reaching a solution or the continuation of escalation.

The euro rose by 0.35% against the dollar to $1.1798, and the British pound also climbed by 0.46% to $1.3564, returning to its levels before the outbreak of the war.

Elsewhere, the dollar declined by about 0.4% against the Japanese yen to 158.75 yen.

The yen remains vulnerable to selling pressure amid concerns of the deterioration of Japan's trade balance and the high probability of oil prices remaining at elevated levels, according to Keiichi Iguchi, senior strategist at Resona Holdings.

The probability of the Bank of Japan raising interest rates this month has also declined, after having been considered strong previously, as the war increased market volatility and negatively affected the clarity of economic forecasts.

Ray Attrill, head of currency strategy at National Australia Bank, said that the Bank of Japan remaining unchanged in its position at the end of April could push the dollar-yen exchange rate to exceed the 160 yen level, a level viewed in markets as a red line that may call for government intervention in the currency market.

Gold prices rose by more than 1% in European markets on Tuesday, on their way toward recording the highest level in several weeks, supported by the broad decline in U.S. dollar levels in the foreign exchange market, which comes after a breakthrough in negotiations between the United States and Iran, despite the naval blockade that the U.S. Navy began implementing on the Strait of Hormuz and Iranian ports.

With the current slowdown in global oil prices, concerns of accelerating global inflation are receding, reducing pressure on the Federal Reserve to raise interest rates in the near term.

Price overview

• Gold prices today: Gold metal prices rose by 1.2% to ($4,796.42), from the opening level of trading at ($4,741.03), and recorded a low of ($4,741.03).

• Upon price settlement on Monday, gold prices lost 0.2%, in the second consecutive daily loss, due to correction and profit-taking operations from a three-week high at $4,857.56 per ounce.

The U.S. Dollar

The dollar index fell on Tuesday by 0.25%, deepening its losses for the seventh consecutive session and recording a six-week low, reflecting the continued drop in the levels of the American currency against a basket of global currencies.

As we know, the drop in the levels of the American currency makes gold bullion priced in U.S. dollars more attractive to buyers holding other currencies.

This drop comes amid improved risk sentiment in the markets after media reports confirmed the continuation of negotiations between the United States and Iran regarding reaching a lasting peace agreement in the Middle East.

Diplomatic efforts

Diplomatic efforts continue, sponsored by Pakistan and Turkey, to bring viewpoints closer between the United States and Iran and to push toward engaging in a new round of negotiations, following the stumbling of the previous round held in the Pakistani capital, Islamabad, on Friday.

Media reports confirmed that a new round of negotiations between Washington and Tehran may be held in Islamabad next Thursday, with the Swiss capital, Geneva, proposed as a potential alternative for the second round of U.S.-Iranian negotiations.

Keiichi Iguchi, senior strategist at Resona Holdings, said: The series of statements has created some relief in the markets, as it renewed the possibility of reaching a diplomatic solution.

Global oil prices

Global oil prices fell by an average of 1%, with signs appearing that Washington and Tehran may revive peace talks after the United States began a blockade of the Strait of Hormuz.

U.S. interest rates

• After the decline in oil prices and according to the "FedWatch" tool of the CME Group: pricing of the probability of keeping U.S. interest rates unchanged at the April meeting rose from 96% to 99%, and pricing of the probability of raising interest rates by about 25 basis points fell from 4% to 1%.

• In order to re-price those probabilities, investors are closely following the release of more economic data from the United States.

Gold performance expectations

Phillip Streible, chief market analyst at Blue Line Futures, said: The market is heavily influenced by news. Eyes are on the price of crude oil because it will directly affect inflation, and this in turn will affect Federal Reserve policy.

SPDR Fund

Gold holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, decreased on Monday by about 5.23 metric tons, bringing the total down to 1,047.19 metric tons, which is the lowest level since March 30.