Middle East Tensions Escalate, Affecting Oil Markets

Geopolitical risk heightened as Iran launched missiles toward Israel, which was followed by Israeli retaliatory strikes on military targets in Iran. West Texas Intermediate (WTI) oil prices held firm around $90.50 per barrel, while OPEC+ also agreed to a modest oil output quota increase for July.

US Dollar Strengthens on Fed Rate Hike Speculation

The US Dollar Index held steady near a two-month high as market participants increased bets on further Federal Reserve interest rate hikes. This dollar strength contributed to weakness against a range of other currencies, including the British Pound and Canadian Dollar, despite some risk aversion easing slightly.

Precious Metals Show Divergent Performance

Gold prices recovered some ground, finding support as a safe-haven asset amid the escalating conflict in the Middle East. Conversely, silver prices fell, pressured by the strong US Dollar and concerns that rising oil prices could fuel inflation, thereby reinforcing expectations for higher interest rates.