Tensions between the United States and Iran are back in the spotlight of global markets ahead of another round of nuclear talks in Geneva this week.
US President Donald Trump said Iran is now more likely to reach a deal than Washington. The statement came as the US increased its military presence in the Middle East and hours before his State of the Union address in Washington.
According to Trump, the main issue that remains an obstacle is Tehran’s refusal to give a clear commitment that it will not develop nuclear weapons.
He stressed that so far, the US has not received firm assurances from Iran on the matter.
The US and Iran are scheduled to hold talks on Thursday in Geneva, Switzerland with a main focus on Iran’s nuclear program.
Trump stressed that his priority is to resolve the conflict through diplomatic channels, but hinted that a military option still exists if the talks fail.
On the Iranian side, Foreign Minister Abbas Araghchi said that the proposed agreement is still in the discussion stage and has not been finalized by Tehran’s top leadership.
The proposal is said to include elements that take into account the concerns and interests of both countries, with the goal of reaching an agreement in the near future.
Iranian President Masoud Pezeshkian said previous talks had given encouraging signals, but stressed that Iran was ready to face any eventuality if the situation changed.
Previous rounds of talks failed to produce significant progress, and tensions continued to rise when Trump warned of the possibility of limited air strikes on Iran.
Washington has also reportedly beefed up its military presence in the region in recent weeks.
In a related development, the US State Department ordered the evacuation of non-emergency personnel from the US embassy in Beirut following a renewed air strike warning. The move signals a growing level of geopolitical risk.
Trump also said he was considering limited air strikes while giving Tehran a two-week extension to reach a nuclear deal.
At the same time, Iran has signaled its willingness to make concessions on its nuclear program in exchange for the lifting of sanctions and recognition of its right to enrich uranium.
Overall, the market is now closely monitoring the Geneva talks as any positive developments have the potential to ease geopolitical risks and pressure safe-haven asset prices, while a failure of the talks could trigger a surge in volatility in the energy, gold and major currency markets.
