Geopolitical Tensions Support Gold

Gold prices edged higher as uncertainty surrounding the reopening of the Strait of Hormuz fueled safe-haven demand. Tensions escalated after Iran ruled out further negotiations with the current US administration, contributing to a more than 6% surge in WTI crude oil prices and keeping the geopolitical risk premium elevated in the market.

Markets Cautious Ahead of US Inflation Data

Traders remained on edge while awaiting a crucial US inflation report, which is expected to influence the Federal Reserve's monetary policy path. This caution follows a recent US jobs report that came in weaker than expected, softening the performance of some emerging market assets and leading to a pause in the Mexican Peso's rally.

US Dollar Firms Amid Currency Crosscurrents

The US Dollar strengthened against a basket of currencies, finding support as the surge in oil prices increased risk aversion among investors. The dollar's advance was somewhat tempered by relative strength in other currencies, with the British Pound and Canadian Dollar both posting gains against the greenback.