Hawkish Fed Commentary Fuels Rate Hike Bets

Federal Reserve officials expressed a hawkish outlook on monetary policy, highlighting that persistent inflation remains a primary focus for setting rates. Kansas City Fed President Schmid cautioned against assuming inflation is temporary, while Dallas Fed President Logan explicitly called for a rate hike before the upcoming July meeting.

Geopolitical Tensions Spike Oil Prices and Risk Aversion

Heightened geopolitical risk in the Middle East has become a key market driver, fueling a flight to safety and concerns over energy supply. Reports of Houthi threats against Saudi oil infrastructure and a US House Republican proposal related to funding for a potential conflict with Iran have contributed to a sharp rise in crude oil prices.

Stronger Dollar Weighs Heavily on Precious Metals

The US Dollar strengthened significantly against a basket of major currencies, bolstered by its safe-haven status amid geopolitical turmoil and by stronger-than-expected US labor market data. This renewed dollar strength, coupled with expectations for further Federal Reserve tightening, created significant headwinds for precious metals, pushing gold prices below the $4,000 mark and sending silver to test the $55 support level.