A direct communication channel between U.S. envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi has been reactivated after a period of silence, according to a U.S. official and an informed source. This marks the first known exchange since tensions escalated following the U.S.-led war in the region. While U.S. President Trump dismissed the possibility of a deal, he acknowledged the need for dialogue to manage hostilities. Iranian Foreign Minister Araghchi, however, denied seeking a truce, emphasizing Iran's military stance and demanding compensation for war victims. The situation remains fluid, with uncertainty over whether Iran's government maintains control over its armed forces. The renewed communication could impact global markets, particularly oil prices, which have been volatile due to regional tensions. Investors are monitoring whether these talks lead to de-escalation or further conflict. The U.S. military's standard war planning includes both escalation options and off-ramps, but Trump's reluctance to commit to a resolution suggests prolonged uncertainty. This ambiguity may weigh on risk assets like equities while boosting safe-haven assets such as gold. For traders, the key variables to watch are oil price movements, statements from U.S. and Iranian officials, and geopolitical developments in the Gulf. If Iran's military actions intensify despite government claims, it could force a reassessment of market positioning. Central banks and energy markets will likely react swiftly to any shift in the conflict's trajectory.

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