Gold and Silver Prices Plunge

Gold prices broke below the $4,000 level while silver hit a new yearly low, with both metals experiencing significant declines during the North American session. The sell-off was primarily driven by a surge in the US Dollar and trader caution ahead of upcoming US Personal Consumption Expenditures (PCE) inflation data.

US Dollar Rallies to 13-Month High

The US Dollar strengthened significantly against a broad basket of currencies, with the Dollar Index reaching its highest point in over a year. This firm tone is supported by expectations of a "higher-for-longer" Federal Reserve policy outlook and some safe-haven demand, leading to weakness in currencies such as the Malaysian Ringgit, Canadian Dollar, and British Pound.

Oil Prices Slide as Geopolitical Tensions Ease

West Texas Intermediate (WTI) crude oil prices fell sharply to their lowest level since March as shipping through the Strait of Hormuz began to normalize. This development eased global supply concerns and contributed to weakness in oil-sensitive currencies, including the Canadian Dollar.

Central Bank Policies Show Divergence

Global monetary policy continues to diverge, with an European Central Bank (ECB) official indicating that more interest rate hikes are necessary to control inflation. Conversely, central banks in countries like Hungary and Brazil are pursuing more dovish or easing policies, a contrast that reinforces the current strength of the US Dollar.