Gold prices extended their drop for a third consecutive session on Thursday, hitting a two-month low, as the price fell sharply below the EMA (9) on the four-hour chart. The yellow metal is currently trying to rebound from the lower boundary of the bearish channel but still trades below the first daily support of $4396. A break below the S1 could dump prices toward the second support level of $4336. On the upside, if the price reclaims the pivot point depicted at $4462, it may rise towards resistance levels of $4522 then $4588.
Global markets witnessed heightened volatility and caution during Thursday’s trading session after escalating tensions between the United States and Iran following recent U.S. strikes on an Iranian military site. The developments pushed oil prices up by more than 3% amid concerns over global supply disruptions, while the U.S. dollar index climbed to its highest level in a week as investors increased demand for safe-haven assets.
Market Watch
U.S. launches strikes on Iranian military site
The United States launched new airstrikes targeting an Iranian military site near the city of Bandar Abbas, according to a U.S. official, marking a fresh escalation in tensions between Washington and Tehran despite ongoing diplomatic efforts aimed at easing the conflict.
Reports said U.S. forces targeted a drone command facility that was allegedly posing a threat to American troops and commercial shipping in the Strait of Hormuz. Several Iranian drones were also reportedly shot down during the operation.
Iran, meanwhile, described the U.S. strikes as a violation of the fragile ceasefire agreement, warning that the attacks would not go unanswered, amid growing fears of a broader military confrontation in the region.
The latest developments impacted global markets, with oil prices rising on concerns over the security of shipping routes through the Strait of Hormuz, one of the world’s most critical oil transit chokepoints.
Oil prices rise more than 3% amid escalating U.S.-Iran tensions
Global oil prices climbed more than 3% during Thursday’s trading session, supported by escalating geopolitical tensions in the Middle East following recent U.S. airstrikes on an Iranian military site, raising investor concerns over potential disruptions to global energy supplies.
Brent crude rose above $84 per barrel, while U.S. West Texas Intermediate posted strong gains as traders moved toward energy-related assets amid growing risks surrounding shipping security in the Strait of Hormuz.
Analysts said markets are closely monitoring any potential Iranian response, particularly as the region represents one of the world’s most critical routes for global oil exports, which could lead to further volatility in crude prices in the coming period.
Prices were also supported by declining U.S. crude inventories and expectations of stronger summer fuel demand, alongside ongoing uncertainty regarding the outlook for global supplies.
Dollar index climbed to a one-week high
The U.S. dollar index climbed to its highest level in a week during Thursday’s trading session, supported by increased demand for the U.S. currency as a safe-haven asset amid escalating geopolitical tensions between the United States and Iran, while investors also awaited key U.S. economic data releases.
The dollar posted gains against a basket of major currencies as investors shifted toward safer assets due to concerns over a broader conflict in the Middle East and its potential impact on the global economy and energy markets.
The greenback also received additional support from expectations that the U.S. Federal Reserve may keep interest rates elevated for a longer period, particularly after strong economic data reinforced expectations of a tighter monetary policy stance.
Meanwhile, other major currencies came under pressure, with both the euro and the British pound weakening against the dollar as investors reduced risk exposure across global financial markets.
Looking Ahead
Global markets are awaiting the release of key U.S. economic data later today, most notably the Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge, alongside the preliminary U.S. Gross Domestic Product (GDP) data. Investors are closely watching these figures for fresh signals on the future path of U.S. monetary policy and interest rate expectations amid ongoing uncertainty over the strength of the U.S. economy and inflation trends.