Gold prices slipped on Tuesday after failing to hold above the bearish channel’s middle line on the four-hour chart. If the yellow metal fails to find positive support, it may continue its downward trend, which could extend toward support levels at $4502 then $4476. On the other hand, if the price breaks above the daily pivot point of $4544, it could test resistance levels near $4581 then $4606.
Global markets remained on edge as the United States launched new strikes on Iran, dampening hopes for a swift peace agreement and pushing oil prices higher amid concerns over supply disruptions in the Middle East. Meanwhile, bond markets stabilized after last week’s sharp selloff, as investors weighed persistent inflation risks and the potential impact of prolonged geopolitical tensions on the global economy.
Market Watch
U.S. launches new strikes on Iran
The United States announced that it had carried out new military strikes against Iranian targets in southern Iran, including missile launch sites and boats suspected of being used to lay mines near the Strait of Hormuz, according to the U.S. Central Command (CENTCOM).
Washington stated that the strikes were conducted as “defensive measures” to protect U.S. forces in the region, amid growing concerns over the collapse of the fragile ceasefire between the two sides. Media reports indicated that explosions were heard in several areas in southern Iran, including Bandar Abbas and Jask, as military tensions in the Gulf continue to escalate.
CENTCOM spokesperson Captain Tim Hawkins said the operations targeted “direct threats” to U.S. forces, adding that Washington “continues to defend its personnel while exercising restraint during the ceasefire period.”
The developments come as tensions between Washington and Tehran persist over Iran’s military activities and nuclear program, while global markets closely monitor the impact of the escalation on shipping routes and worldwide energy supplies.
Oil rises as hopes for a peace deal fade
Global oil prices rose during Tuesday’s trading session as hopes for a swift peace agreement between the United States and Iran faded, increasing concerns over continued supply disruptions in the Middle East.
Brent crude climbed more than 2% to trade near $98 per barrel, while U.S. West Texas Intermediate crude also advanced amid ongoing geopolitical tensions and growing concerns surrounding the Strait of Hormuz, one of the world’s most important energy shipping routes.
The gains came after the United States carried out new military strikes against Iranian targets, alongside statements from U.S. officials indicating that negotiations with Tehran could take several more days without guarantees of a near-term final agreement.
Investors are closely monitoring developments in the Middle East, amid fears that any further escalation could disrupt global oil flows and drive energy costs higher, potentially increasing inflationary pressures on the global economy.
Uncertainty surrounding the full reopening of the Strait of Hormuz also supported crude prices, particularly as shipping disruptions and supply concerns from the region persist.
Bonds steady after last week’s rout on
After plunging last week due to concerns that prolonged increases in energy costs will fuel inflation and lead to rate increases in both developed and emerging nations, bonds were mainly stable.
“We are likely to see periodic yield retracements on occasions when geopolitical risks subside, but inflation and fiscal risks are likely to be more sustained,” stated Eric Robertsen, chief strategist and head of global research at Standard Chartered. The yield on the two-year U.S. Treasury note fell nearly 7 basis points to 4.0573%, while the yield on the 10-year note fell more than 6 basis points to 4.5083%.
Looking Ahead
Markets are awaiting the release of the U.S. Consumer Confidence data later today for further clues on the strength of consumer spending and the outlook for the world’s largest economy. Investors will closely monitor the figures for signals on future Federal Reserve policy decisions, particularly amid ongoing concerns over inflation, interest rates, and slowing global growth.