Geopolitical Tensions Drive Oil Prices and Risk Aversion

Escalating conflict in the Middle East has heightened risk aversion across global markets, pushing Brent crude oil prices above $100 per barrel due to supply concerns. This "war premium" in energy markets, combined with new US tariff announcements, contributed to a sell-off in Asian and US equity markets as investors moved away from riskier assets.

US Dollar Strengthens on Safe-Haven Flows and Fed Outlook

The US Dollar gained strength, supported by both safe-haven demand amid geopolitical uncertainty and rising US Treasury yields. Markets are factoring in the potential for further Federal Reserve interest rate tightening, which has lifted the US Dollar Index.

Gold Retreats While Silver Holds Ground

Gold prices retreated from recent highs as the metal's rebound was capped by the appreciating US Dollar and surging oil prices creating two-way risk. In contrast, silver edged slightly higher, finding support above the $58.00 level as the greenback trimmed some of its intraday gains.

European Economic Data and ECB Policy in Focus

The Euro found some support from surprisingly strong manufacturing PMI data in Germany and the wider Eurozone, which showed a return to expansion. This occurred amid ongoing market discussions around potential European Central Bank (ECB) rate hikes to address inflation risks, though some officials see no evidence of broad second-round effects yet.