Geopolitical Tensions Drive Oil Prices Higher

Renewed attacks on commercial vessels near the Strait of Hormuz have triggered concerns over global oil supply and threatened the recent recovery in shipping. The geopolitical uncertainty pushed West Texas Intermediate (WTI) crude oil prices over 2% higher as the US reportedly revoked a license for Iranian sales in response to the incidents. These developments have heightened regional tensions and impacted energy market sentiment.

US Dollar Strengthens on Safe-Haven Demand

The US Dollar gained ground as rising geopolitical risk in the Middle East prompted a flight to safety among investors. The dollar strengthened against several major currencies, including the British Pound and the New Zealand Dollar. This broad demand for the greenback was also supported by cautious remarks from Federal Reserve officials regarding inflation.

Precious Metals Stumble Amid Dollar Strength

Gold prices pulled back, failing to sustain a move higher as a strengthening US Dollar and rising inflation expectations provided headwinds. Silver experienced a more pronounced decline, tumbling nearly 3% as the dismal market mood overshadowed its safe-haven appeal.

Mixed Economic Signals from Major Economies

Beyond the primary focus on geopolitics, several countries released varied economic reports. Canada’s merchandise trade surplus widened in May, though the data had a muted impact on its currency. Elsewhere, German industrial output showed signs of a modest recovery, while China's central bank took measures to bolster Hong Kong's role as an offshore yuan hub.