Gold and Silver Prices Under Pressure

Gold prices remained depressed amid a strengthening US Dollar and expectations of a continued hawkish stance from the Federal Reserve. This downward pressure was noted in various markets, including India, as geopolitical risks also influenced investor sentiment. Silver also edged lower after posting significant gains in the previous session.

Markets Weigh Conflicting Middle East Signals

Market sentiment was pulled in opposing directions by developments concerning US-Iran relations, creating uncertainty across asset classes. Early reports of renewed military friction drove risk-averse behavior and a stronger US Dollar, but this was later tempered by growing hopes for a peace agreement. The prospect of de-escalation contributed to a rally in some equity markets and falling oil prices.

US Dollar Strengthens on Inflation Data and Risk Aversion

The US Dollar Index advanced, gaining against several major currencies, supported by a combination of economic data and geopolitical factors. Higher-than-expected US Producer Price Index (PPI) figures reinforced a hawkish Federal Reserve outlook, while ongoing uncertainty in the Middle East bolstered the dollar's safe-haven appeal. This strength was evident as currencies like the Canadian Dollar and New Zealand Dollar weakened.

European Economic Data and Central Bank Policy in Focus

Investors monitored key economic releases from Europe, with Germany's final May inflation confirmed at 2.7% and the UK's GDP showing a 0.1% contraction for April, in line with expectations. Following a recent interest rate hike, European Central Bank officials stated that they are keeping all options open for the July policy meeting. The British Pound showed a muted reaction to the GDP data, while the Euro steadied against major peers.