Evening digest: Bessent warns Iran partners, Gold hits 3-month high

US Treasury Secretary Scott Bessent threatened economic punishment against countries doing business with Iran as the Trump administration sought to intensify pressure on Tehran.

Gold prices climbed to their highest level in more than three months as a weaker dollar and lower bond yields supported demand for the precious metal.

Oil prices fell more than $2 a barrel as investors took profits after two weeks of gains while awaiting details of new US sanctions on Iran.

Bitcoin retreated after approaching $80,000, with analysts assessing whether the cryptocurrency can sustain its recent rally after a wave of leveraged short liquidations.

Bessent's economic warning for countries helping Iran

Bessent said the US was launching what he described as an “economic D-Day” campaign aimed at isolating Iran and severing its financial connections around the world.

President Donald Trump is contacting world leaders with requests to end their interactions with the Iranian regime, Bessent said at a press conference.

Countries will be given a timeline to shut down their links with Iran or potentially face unilateral U.S. punishment.

“We are launching an economic onslaught against Iran’s financial connections around the globe,” Bessent said, describing the effort as “economic asphyxiation of this regime.”

The Treasury Department announced sanctions against more than 60 entities, focusing on five areas it described as vital Iranian lifelines: digital assets, technology, gold, aviation and shipping. Bessent also said the US could sanction a major financial institution over its Iran ties by the end of the week, without identifying the institution.

The measures could increase tensions with China, which buys most of Iran’s oil and has so far resisted calls to stop doing business with the country. Bessent said the administration was giving countries an opportunity to change their behavior rather than immediately imposing penalties.

Gold price climbs to more than 3-month high

Gold prices rose 1% to $4,652.69 an ounce after earlier reaching $4,680.70, the highest level since May 14. US gold futures for December delivery settled 0.51% higher at $4,704.30.

The precious metal was supported by a weaker dollar and recent declines in Treasury yields. Gold had already gained more than 5% last week following the US Treasury's announcement of a larger bond buyback program.

Jim Wyckoff, a market analyst at American Gold Exchange, said both fundamental and technical factors were supporting gold.

He added that the path of least resistance could remain “sideways to higher” in the coming weeks unless a technical reversal emerges.

Gold also moved above its 200-day moving average last week, strengthening its recent momentum.

Gold-backed exchange-traded funds attracted 46.7 metric tons of inflows worth $6.4 billion last week, their largest weekly demand in 10 months, according to the World Gold Council.

Oil prices retreat as Iran sanctions loom

Oil prices declined more than $2 a barrel as traders took profits following recent gains and awaited details of the expected expansion of US sanctions against Iran.

Brent crude futures fell 2.44%, to $92.09, while West Texas Intermediate crude dropped 2.3%, to $85.06.

Both benchmarks had gained more than 5% last week as stalled US-Iran peace negotiations constrained shipments through the Strait of Hormuz, a key route for global energy supplies.

Fewer than 20 commodity vessels transited the strait over the weekend, according to shipping data, as Iranian and US blockades restricted traffic.

Morgan Stanley analysts raised their Brent forecasts and projected a peak of $100 a barrel in the fourth quarter.

However, SEB analyst Bjarne Schieldrop said Brent prices around $93 suggested that sufficient oil was still moving through the Strait of Hormuz and the Persian Gulf.

Bitcoin retreats after nearing $80,000

Bitcoin traded at $78,740 after approaching $80,000.

The retreat has raised questions about whether buyers will return after the cryptocurrency's rapid advance.

Analysts had warned that profit-taking could emerge after the recent gains.

Charles Schwab's Jim Ferraioli said $6.4 billion in leveraged short perpetual futures positions had been liquidated since Wednesday. “Ultimately, short squeezes tend to be short lived,” Ferraioli said, adding that the move could help settle the debate over whether the market has reached a bottom.

Bitcoin futures have also moved into backwardation, meaning futures prices are below spot prices.

Ferraioli said some hedge funds that appear bullish through their net-long futures positions may instead be pursuing basis trades rather than taking a directional view.