Precious Metals Gain as Geopolitical Risk Subsides
Gold and silver prices started the week with strong gains as a pause in the US-Iran conflict and renewed hopes for diplomacy sent oil prices sharply lower. This development eased market fears of spiraling inflation and subsequent interest rate hikes. Silver experienced a particularly sharp rally of over 2% to trade near $60, while gold prices also advanced for a second consecutive day.
US Dollar Declines on Improved Risk Sentiment
The US Dollar weakened broadly as the de-escalation in Middle East tensions diminished its safe-haven appeal. The US Dollar Index (DXY) fell, reflecting losses against a basket of major currencies including the euro, British pound, Japanese yen, and the commodity-linked Canadian and Australian dollars. The improved risk sentiment in global markets was the primary driver behind the dollar's decline.
Notable Monetary and Economic Developments in Asia
Central bank actions and economic events presented a varied picture across key Asian economies. The Monetary Authority of Singapore surprised markets by tightening its policy for a second consecutive time, while the Indonesian Rupiah weakened following the resignation of the central bank's governor. Elsewhere, Japan’s service producer prices for June rose, partially attributed to high freight costs from the Iran war, and China's central bank set a stronger daily reference rate for the yuan.
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