Middle East Tensions Pressure Precious Metals

Renewed hostilities in the Middle East, with reports of strikes between US forces and Iran, have diminished hopes for a peace deal and increased geopolitical risk aversion. This uncertainty supported safe-haven demand for the US Dollar, which in turn exerted downward pressure on gold and silver prices. The conflict also contributed to a rise in oil prices, with WTI gaining ground amid missile launches in the region.

Contrasting Economic Data from Asia-Pacific

Economic reports from the Asia-Pacific region presented a mixed picture, influencing regional currency movements. China's services activity grew at its fastest pace in three months, with the RatingDog Services PMI for May rising more than expected. Conversely, Australia's economy showed signs of slowing, as its first-quarter GDP growth came in below expectations, weighing on the Australian dollar.

Japanese Yen Weakens, Prompting Intervention Warnings

The Japanese Yen continued to weaken, approaching the key 160.00 level against the US Dollar, a threshold that has previously drawn market attention. Japanese financial officials reiterated their readiness to act in the foreign exchange market to counter excessive movements. This currency weakness persists even as speculation mounts that the Bank of Japan is facing pressure to consider a rate hike.