Precious Metals Pressured by Stronger Dollar and Oil

Gold prices struggled to maintain momentum, reversing early gains as a rebound in the US Dollar and rising oil prices created headwinds for the non-yielding asset. While escalating geopolitical tensions in the Middle East provided some initial safe-haven support, the broader market pressures ultimately weighed on the metal. Silver prices also moved lower during the session, following a similar trajectory.

US Dollar Gains as Risk-Off Sentiment Dominates

The US Dollar recovered from early weakness and turned positive as a risk-off mood settled over global markets, contributing to a slide in US stock futures. This shift in sentiment was largely attributed to rising oil prices and escalating tensions in the Middle East. The dollar's strength, in turn, exerted pressure on commodity-linked currencies, including the Australian, New Zealand, and Canadian dollars.

Japanese Yen Rallies on Rate Hike Speculation

The Japanese Yen strengthened significantly as market participants increasingly priced in a potential interest rate hike from the Bank of Japan. This speculation fueled a rally that pushed the USD/JPY pair below the 155 level and sent the GBP/JPY cross to a fresh year-to-date low. Some reports suggested the move was amplified by the unwinding of carry trades, though the Yen later pared some of its sharp gains.

Energy and Industrial Metals Prices Surge

Energy and industrial metal prices saw significant upward movement, stoking wider market concerns about inflation and supply chains. Oil prices climbed on reports of supply shocks and geopolitical risk factors, while natural gas also remained elevated amid disruptions. Separately, copper prices surged to an all-time high, driven by a combination of US tariff impacts and ongoing supply worries.