Precious Metals Prices Decline

Gold prices struggled, trading near the $3,900 level as the market continued to exhibit a downside bias after recently touching a one-year low. Concurrently, silver prices experienced a significant drop, falling more than 3% from the previous day's closing price. Traders are closely monitoring a combination of geopolitical developments and macroeconomic risks while assessing the precious metals market.

Geopolitical Tensions Rise in Middle East

Reports of a United States military strike on Iran's Qeshm Island are introducing new geopolitical risk into the markets. The development contributed to a rebound in oil prices and a surge in European natural gas prices, with commodity traders monitoring the situation for potential escalation.

Markets Focus on US Midterms and Fed Policy

Investor attention is centered on the US midterm elections, leading to defensive positioning in the markets as indicated by lower Dow Jones futures and a softer US Dollar. While analysts are weighing the impact of potential Democratic gains in Congress, the Federal Reserve's policy narrative is viewed as the dominant long-term driver for the dollar. Some strategists maintain the view that the Fed will deliver one more interest rate hike this year to maintain its credibility on inflation.