Houthi forces have reached Perim Island inside the Bab el-Mandeb Strait, adding a third chokepoint risk alongside a disrupted Strait of Hormuz and a temporarily shut Saudi pipeline. Brent crude moved above $100 this week, but one algo trader argues the same oil shock could push gold higher or lower, depending on which channel dominates.
A third chokepoint joins Hormuz and the Saudi pipeline
The Houthis have reached Perim, the small island sitting inside the Bab el-Mandeb Strait, which connects the Red Sea with the Gulf of Aden and the Indian Ocean and forms part of the route linking Middle Eastern energy flows to the Suez Canal, Europe and Asia. That advance comes as Hormuz remains severely disrupted, and Saudi Arabia's East-West pipeline — the alternative route that had been moving barrels away from Hormuz — has been temporarily shut after a drone attack. With three separate pieces of infrastructure now under pressure, the question becomes how the oil gets out at all.
Gold's response is not straightforward
Brent moved above $100 this week, and the obvious read is that oil up means inflation up means gold up, as shipping disruption feeds higher energy prices, geopolitical fear and demand for protection. But the trader argues oil can push gold the other way too: if oil above $100 makes inflation harder to kill, central banks stay hawkish, bond yields rise, holding non-yielding gold becomes more expensive, the dollar strengthens, and gold comes under pressure instead. The same shock, in other words, can produce opposite outcomes depending on which channel — inflation fear or rate expectations — dominates at the time.
What a wider closure would mean
The trader stresses that shipping through Bab el-Mandeb has not been universally shut as of this writing, but raises the scenario as a hypothetical: if Hormuz stays disrupted, the Saudi pipeline stays unavailable, and Bab el-Mandeb becomes largely unusable for tanker traffic, oil does not disappear — it has to take longer, costlier routes with higher insurance and more uncertainty. That difficulty of movement itself becomes a risk premium that can spread beyond oil into inflation expectations, bonds, currencies and eventually gold.
Watching oil first is now the priority, the trader says: if Brent keeps rising alongside Treasury yields, the simple "war means gold up" thesis looks shakier; if yields stop responding while safe-haven demand accelerates, that points to a different environment for gold entirely. The chain runs from Bab el-Mandeb through oil, inflation and rates to the dollar and gold — and breaking any single link can change the final result.
Source: MQL5: Traders' Blogs
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