Strong Dollar and Geopolitical Risk Pressure Precious Metals

Gold and silver prices declined as the U.S. Dollar strengthened on significant safe-haven demand. This risk-off sentiment was fueled by rising Middle East tensions, doubts surrounding a potential US-Iran peace deal, and a subsequent surge in oil prices which also weighed on currencies like the Indian Rupee. The stronger dollar, a key headwind for dollar-denominated commodities, pushed gold prices toward their weekly lows.

Global Growth Concerns Mount on Trade and Conflict Warnings

Adding to market uncertainty, the United States is reportedly planning new tariffs on imports from India and several other countries, citing forced-labor practices. This development comes as the Organisation for Economic Co-operation and Development (OECD) cut its global growth forecast. The OECD specifically warned that a protracted war and the failure to secure an Iran peace deal could further damage global growth and push inflation higher.

Central Bank Divergence and Currency Intervention Fears Emerge

Currency markets saw increased volatility as traders monitored central bank actions and commentary amid the uncertain global backdrop. The Japanese Yen gained on persistent concerns about potential government intervention to support the currency, making traders cautious. In contrast, one European Central Bank official signaled that geopolitical tensions would not derail the bank's plans for monetary tightening, while strong US labor data complicated the outlook for Federal Reserve rate cuts.