Hawkish Fed Expectations Bolster US Dollar

The US Dollar strengthened, approaching multi-week highs, as markets repriced for a more hawkish Federal Reserve ahead of the FOMC minutes. This move is supported by rising US Treasury yields, with the dollar's momentum evident against currencies like the Japanese Yen and Australian Dollar. Analysts expect the Fed's minutes to reinforce a focus on inflation, further underpinning the greenback's recent gains.

Gold Pressured by Strong Dollar, Silver Rebounds

Gold prices languished near seven-week lows, pressured by the robust US Dollar and rising yields, which increase the opportunity cost of holding the non-yielding asset. In contrast, silver prices staged a rebound from a recent two-week low, though the same higher Treasury yields that weighed on gold were noted as a factor that could cap silver's upside potential.

Mixed Inflation Signals Emerge from International Central Banks

Monetary policy expectations are diverging among major economies as inflation data provides a mixed picture. Softer consumer price index (CPI) readings in both Canada and the United Kingdom have cooled expectations for aggressive rate hikes from the Bank of Canada and the Bank of England. In Europe, commentary from ECB officials remains split, with some policymakers signaling a need to act against inflation while others feel it is too soon to commit to a June policy adjustment.

Geopolitical Tensions and Oil Prices Remain in Focus

Geopolitical risks are contributing to market volatility and supporting energy prices. Brent crude oil held firm as analysts pointed to persistent risks in the Strait of Hormuz. Elsewhere, renewed tensions between the United States and Iran were cited as a factor influencing sentiment in equity futures markets.