US President Donald Trump wrote on Truth Social on Friday that Iran had breached the ceasefire after drones were launched at ships in the Strait of Hormuz, with one hitting the upper deck of a large cargo-carrying vessel. The source cited was Truth Social, and the post fed into broader market positioning around “risk-on” and “risk-off” conditions, terms used to describe fluctuating appetite for risk across asset classes.
After the post, WTI rebounded from an intraday low of $68.56 to regain $69.00, though it was still down 3.54% on the day. Gold climbed towards a two-day high of $4,096 but remained below the $4,100 threshold. In risk-on phases, equities, most commodities other than gold, commodity-linked currencies such as AUD, CAD and NZD, and cryptoassets tend to strengthen; in risk-off periods, bonds, gold and safe-haven currencies including USD, JPY and CHF are typically favoured.
Market Strategy Shift Amid Geopolitical Uncertainty
Given the news on June 26, 2026, we are shifting our strategy to a clear “risk-off” stance for the coming weeks. The drone strike in the Strait of Hormuz introduces significant geopolitical uncertainty, which typically causes investors to play it safe. Any disruption in this critical waterway, through which about 21% of global petroleum liquids pass, has an immediate impact on asset prices.
We see the immediate bounce in WTI crude oil as just the beginning, and traders should position for higher energy prices. Historically, similar tensions in the region, like the 2019 tanker attacks, caused oil prices to surge over 4% in a single day. We are looking at call options on WTI and Brent futures, anticipating a push toward the mid-$70s as a first target.
Safe-Haven Assets and Defensive Positioning
This event strongly supports gold as a primary safe-haven asset. The move towards $4,096 shows traders are already hedging against uncertainty, and we believe a sustained break above the $4,100 level is now likely. Long positions in gold futures or related ETFs are advisable to capitalize on this flight to safety.
We expect a spike in market volatility, and the VIX index has already jumped from around 14 to above 18, reflecting rising fear. Derivative traders should consider buying protection against a potential stock market downturn. Purchasing put options on major indices like the S&P 500 can hedge portfolios against a sell-off as capital moves from equities to safer assets.
In currency markets, we anticipate strength in the US Dollar, Japanese Yen, and Swiss Franc. The US Dollar Index (DXY) is already climbing towards the 106 level, confirming this trend. We see opportunities in shorting commodity-driven currencies, like the Australian Dollar, against the US Dollar (AUD/USD) as global growth concerns mount.
