Geopolitical Tensions Drive Market Uncertainty
Markets are closely monitoring escalating geopolitical tensions in the Middle East, particularly after reports that Iran struck US military targets in Bahrain and Kuwait. This heightened uncertainty has weighed on risk assets like equities, while oil prices have been volatile, retreating from recent highs on hopes of a potential ceasefire despite the ongoing conflict.
Silver Surges as Precious Metals Gain
Amid the uncertain market backdrop, precious metals found support, with silver prices surging over 3% to trade near $58.20 as the rally in oil prices took a pause. Gold prices also saw gains in key physical markets such as India, reflecting broader safe-haven interest.
US Dollar Struggles as Focus Shifts
The US Dollar struggled to extend its rebound, with its performance being capped by the focus on geopolitical developments and questions surrounding the Federal Reserve's inflation framework in a high-energy-price environment. The Euro traded in a tight range against the greenback, finding its own rally limited by the same tensions, while the Japanese Yen remained under pressure.
Key Economic Data Lifts Sterling and Kiwi
The British Pound strengthened after UK labor market data showed wage growth holding steady and the unemployment rate remaining stable, beating market expectations. Similarly, the New Zealand Dollar gained traction after hotter-than-expected CPI inflation data bolstered bets for a future rate hike by the Reserve Bank of New Zealand.
Sources