Geopolitical Hopes Drive Risk-On Sentiment

Market sentiment improved at the start of the week on reports of diplomatic progress between the United States and Iran, fueling hopes for an end to their conflict and the reopening of the Strait of Hormuz. This spurred a rally in Asian stocks and risk-sensitive currencies, though officials from both nations cautioned that a deal was not yet imminent and key details remained unresolved.

Gold and Silver Prices See Limited Gains

Gold prices posted modest gains, finding support from a weaker US Dollar, but the precious metal's upside was reportedly limited as the broader risk-on mood dampened safe-haven demand. Silver also maintained a mildly bullish stance, though it eased back from resistance levels after failing to secure a breakout earlier in the session.

US Dollar Declines Amid Easing Tensions and Fed Speculation

The US Dollar Index weakened as optimism for a diplomatic solution in the Middle East reduced its appeal as a safe-haven currency. A White House economic adviser also commented that a resolution leading to lower oil prices could create room for the Federal Reserve to consider interest rate cuts in the future.

Oil Prices Tumble on Supply Outlook

Oil prices fell sharply, with WTI futures dropping over 6% on expectations that a potential US-Iran agreement could restore supply through the critical Strait of Hormuz. The prospect of increased global supply significantly altered the near-term outlook for the energy market.