The Deal That Lasted One Day

On Friday, Iran declared the Strait of Hormuz “completely open.” Oil
crashed 10%. Stocks hit all-time highs.

Trump posted “THANK YOU!”

By Saturday afternoon, IRGC gunboats were firing on tankers.

By Sunday, the US Navy had shot and seized an Iranian cargo ship.

The fastest TACO cycle yet: 18 hours from euphoria to gunfire.

Today, the channel is back. Oil is up 4-5%. Gold is down 1.08%.
Silver is down 2.67%. The dollar is firming. Stocks are falling. The
familiar pattern: oil up → inflation sticky → Fed frozen
→ dollar strong → gold pressured.

The ceasefire expires tomorrow. Perhaps the delusion that I covered previously will expire as well.

The Weekend, Hour by Hour

Friday’s Strait reopening lasted less than a day. Here’s the
sequence.

Friday afternoon: Iran’s FM Araghchi declared the Strait “completely
open” for commercial vessels, linked to the Lebanon ceasefire. Oil
crashed over 10%. Markets surged.

Friday evening: Trump posted that the US naval blockade of Iranian
ports “WILL REMAIN IN FULL FORCE AND EFFECT.” Iran’s semi-official
Tasnim news agency criticized Araghchi for creating “various
ambiguities about the conditions for passage, its details, and its
mechanisms.” That criticism came from inside Iran’s own media
ecosystem, which tells you the IRGC was not on board with Araghchi’s
announcement.

Saturday morning: The IRGC reversed the reopening. They announced
the Strait was back under “strict management and control by the
armed forces.” Their statement called the US blockade “acts of
piracy and maritime theft under the guise of a so-called blockade.”
The condition: Iran won’t reopen the Strait until the US lifts its
blockade completely.

Saturday: IRGC gunboats fired on two tankers transiting the Strait.
The UK Maritime Trade Operations agency confirmed. India summoned
Iran’s ambassador after two Indian-flagged ships came under fire.
Lloyd’s List reported that traffic in the Strait came to a halt.
Iran then announced it would prioritize vessels that pay tolls,
postponing passage for those who don’t.

Sunday: The US Navy escalated. USS Spruance fired on the engine room
of the Iranian-flagged cargo ship Touska in the Gulf of Oman and
seized it. This is the same destroyer that intercepted the vessel
from Bandar Abbas earlier in the week. But this time it wasn’t a
redirect. It was shots fired and a seizure.

Sunday: Trump posted: “Iran decided to fire bullets yesterday in the
Strait of Hormuz — A Total Violation of our Ceasefire
Agreement!” He then threatened to “knock out every single Power
Plant, and every single Bridge, in Iran. NO MORE MR. NICE GUY!”

Sunday: Trump also announced that US negotiators would travel to
Islamabad for talks on Monday evening. Iran has not confirmed.
Iran’s state media cited “Washington’s excessive demands,
unrealistic expectations, constant shifts in stance, repeated
contradictions, and the ongoing naval blockade” as reasons for
skepticism. Iran’s foreign ministry spokesperson said there is “no
plan for a second round of negotiations with the US.”

This is where we stand on Monday morning.

Why Friday’s Reopening Failed

In Friday’s Gold Trading Alert, I laid out three conditions embedded in Araghchi’s statement: the
reopening was linked to Lebanon (not the US deal), temporary (until
April 22), and on Iran’s coordinated route (not free passage). I
noted that “the market priced in the headline. The logistics will
take longer.”

What I underestimated was how quickly the contradiction would
surface. The problem was not the conditions in Araghchi’s statement.
The problem was that Araghchi and the IRGC were not aligned.

Araghchi (the diplomat) wanted to demonstrate good faith and create
momentum toward Islamabad Round 2. The IRGC (the military) viewed
Trump’s continued blockade as a violation that made any reopening a
unilateral concession. Tasnim’s public criticism of Araghchi was the
tell. When Iran’s own semi-official media attacks the Foreign
Minister’s statement within hours, the military has overruled the
diplomat.

This internal split is important for what comes next. Araghchi can
promise things. The IRGC controls the Strait. Any deal that doesn’t
have IRGC buy-in will fail the same way Friday’s reopening failed.

The Touska Seizure Changes the Dynamic

The US seizing an Iranian cargo ship is a qualitative escalation.
Previous blockade enforcement involved redirecting vessels. This
involved firing on the engine room and taking custody. That’s a
different category of action, closer to a wartime boarding than a
sanctions enforcement.

Iran will frame this as an act of war during a ceasefire. The IRGC’s
statement already called the blockade “piracy.” Seizing a ship with
gunfire gives that framing more weight internationally.

For the ceasefire expiring tomorrow, this seizure makes extension
harder, not easier. Iran’s negotiators now have to justify returning
to talks while the US holds an Iranian ship. Ghalibaf told state
media that “progress has been made” but “significant gaps remain.”
He confirmed Iran will not hand over enriched uranium. That’s the
same position as Islamabad Round 1.

The Ceasefire Expires Tomorrow

The two-week ceasefire expires on April 22. That’s tomorrow.

Trump says US negotiators are traveling to Islamabad tonight. Iran
says there are “no plans” for a second round. Both statements could
be positioning. Pakistan’s mediation infrastructure is still active.
But the gap between the two sides has not narrowed since Islamabad
Round 1 collapsed on April 12.

The core issues remain:

Nuclear enrichment: Iran refuses to commit to never developing
weapons and refuses to hand over enriched uranium. After losing their Supreme Leader to US-Israeli strikes, the
incentive to pursue nuclear deterrence has only increased. Democratic Rep. Ro Khanna said on ABC: “Khamenei Jr. actually
wants to develop nuclear weapons.”

The Strait: Iran wants sovereign control. The US wants unconditional
free passage. Friday showed that even a temporary reopening
collapses within hours when the underlying trust deficit isn’t
addressed.

Reparations: Iran demands full compensation for war damages. 3,300+
dead. The US won’t pay.

The blockade: Iran wants it lifted as a precondition. Trump says it
stays until the “transaction is 100% complete.”

Lebanon: The 10-day ceasefire is holding but fragile. A French UN
peacekeeper was killed (Hezbollah blamed). Two Israeli soldiers
died. Israel is maintaining an expanded buffer zone. Hezbollah
called the ceasefire “an insult” and said “resistance fighters will
remain in the field.”

If the ceasefire expires without extension, both sides revert to
pre-ceasefire postures. Iran closes the Strait fully. The US
blockade continues. Strikes could resume. Oil spikes. The channel
accelerates.

If the ceasefire is extended (even informally, as a “pause while
talks continue”), the current state of limbo persists. The Strait
stays partially closed. Oil stays elevated. The channel holds at a
slower pace.

Either way, Friday’s euphoria is not coming back without a
structural breakthrough that addresses the nuclear issue, the
blockade, and the Strait simultaneously. Nothing in the weekend’s events suggests that breakthrough is
close.

The Channel Reasserts

Today’s price action tells the story.

Gold price: $4,827,
down 1.08%. Silver: down 2.67%. Oil (WTI): up 3.90%. Brent: up 5.00%. Dollar: up
0.19%. S&P: down 0.45%. Copper: down 1.39%.

Oil up, gold down, silver down harder, dollar firming, stocks
weakening. The channel is transmitting the weekend’s Strait closure
and Touska seizure through the familiar pipeline. Silver’s 2.67%
drop (outperforming gold’s decline by 2.5x on the downside, just as
it outperformed by 3x on Friday’s upside) confirms it’s trading as
the high-beta industrial metal, amplifying moves in both directions.

Brent outperforming WTI by over 100 basis points is the Middle East
supply premium reasserting, the same signal we saw on April 16
before Friday’s reversal.

Just as the situation in the Middle East reversed its course, so did
the price of gold. The precious metal moved back below its mid-Feb
low, below the early-April high, and below the 50% Fibonacci
retracement. This is yet another failure of gold to rally above it.

The technical situation remains exactly as it was – the past
month is just a correction, and this correction appears to have run
out of steam.

Friday’s Scorecard

In Friday’s Gold Trading Alert, I outlined four things to watch over the weekend. All four
resolved:

First: whether commercial tankers would transit Hormuz freely. They
tried. IRGC gunboats fired on them. Traffic halted. The reopening
was political, not operational.

Second: whether the Islamabad Round 2 would be announced. Trump says
yes (Monday night). Iran says no plans. Unresolved but leaning
negative.

Third: whether the Lebanon ceasefire would hold. Holding, but a
French peacekeeper is dead, and Hezbollah called it “an insult.”
Fragile.

Fourth: whether Iran would test the US blockade. Iran sent the
Touska. The US Navy shot it and seized it.

Friday’s closing line: “Overall, it looks like peak optimism is
here. And I don’t think the reality will match it for long.” Peak
optimism lasted 18 hours.

The outlook remains intact.

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Thank you.

Sincerely,

Przemyslaw K. Radomski, CFA