Gold and Silver Fall on Stronger US Dollar

Gold plunged to two-month lows while silver prices dropped significantly, breaking below key technical support levels. The sell-off in precious metals was attributed to a strengthening U.S. Dollar, which revived its safe-haven appeal amid shifting market sentiment and geopolitical developments.

Geopolitical Uncertainty Bolsters Greenback

Conflicting headlines surrounding U.S.-Iran negotiations created market volatility and supported the U.S. Dollar. While Iranian state media reported progress on a draft agreement, U.S. President Trump publicly rejected the possibility of sanctions relief, causing the U.S. Dollar Index to reverse earlier losses as traders moved into the currency for safety.

Oil Prices Fluctuate on Middle East Deal Speculation

Crude oil prices were volatile, initially declining on news of a potential U.S.-Iran deal that could increase supply by reopening strategic waterways. However, prices found some support as analysts noted a rapid normalization of Gulf exports was unlikely, with the uncertainty weighing on commodity-linked currencies like the Canadian Dollar.

Diverging Central Bank Policies Influence Currencies

Global currency markets reflected diverging monetary policy paths from major central banks. The New Zealand Dollar outperformed after the RBNZ delivered a hawkish message signaling future rate hikes, while softer inflation data in Australia complicated the outlook for its central bank. Meanwhile, comments from a Fed official reiterated a readiness to hike rates if needed, highlighting policy differences with other economies like Canada.