US-Iran Tensions Drive Market Sentiment

Escalating geopolitical tensions between the US and Iran are a primary focus for markets, fueling risk-off sentiment. Reports of new US strikes have heightened concerns over potential supply disruptions in the Middle East, notably through the Strait of Hormuz, causing West Texas Intermediate (WTI) crude oil prices to rise.

US Dollar Strengthens on Safe-Haven Demand

The heightened geopolitical risk has triggered a significant flight to safety, boosting the US Dollar against a basket of major currencies. The US Dollar Index (DXY) pushed higher as the greenback gained on the Euro, British Pound, and Swiss Franc. Commodity-linked currencies such as the Australian, New Zealand, and Canadian dollars also weakened against their US counterpart.

Precious Metals Decline Amid Stronger Dollar

Gold and silver prices moved lower despite the geopolitical uncertainty, largely due to the strengthening US Dollar. A stronger greenback typically creates headwinds for dollar-denominated assets by making them more expensive for holders of other currencies. Some market commentary also suggested that fears of rising inflation, stoked by the conflict, contributed to the decline in gold.