Gold prices rebounded on Tuesday after posting a sharp decline in the previous session. The yellow metal is currently trading near the daily pivot point at $4533; if it clings below this level, it could continue to fall toward support levels at $4476 and then $4432. On the upside, if the price rises above the aforesaid pivot point, it may retest resistance levels at $4605 and then $4658.

Global markets are witnessing a state of anticipation and tension amid escalating geopolitical and economic developments that are casting a shadow over the movement of various assets. The United States and Iran have launched new attacks, further intensifying tensions in the region, while oil prices have stabilized as the chances of reaching a truce between the two sides diminish, signaling continued uncertainty. At the same time, the U.S. dollar index is holding firm, heading toward a third consecutive session of gains, supported by increased demand for the currency as a safe-haven asset.

Market Watch

US and Iran launch new attacks

Geopolitical tensions in the Middle East escalated further today as the United States and Iran exchanged new military strikes in the Strait of Hormuz, one of the world’s most critical oil transit routes.

According to media reports, U.S. forces carried out military operations targeting Iranian boats and drones operating near commercial vessels as part of efforts to secure international navigation and ensure the continued flow of energy supplies.

In response, Iran launched a series of missile and drone attacks targeting ships and locations in the region, describing the U.S. actions as a provocation and a violation of prior understandings. The escalation led to renewed maritime clashes and a widening scope of confrontation.

This escalation comes at a time when diplomatic efforts to contain the crisis remain stalled, raising concerns over a potential broader conflict in the region in the coming period.

Oil prices stabilize as US-Iran truce prospects dim

Global oil prices stabilized during today’s trading session as geopolitical tensions between the United States and Iran persisted, with diminishing hopes for a near-term truce between the two sides.

According to reports, Brent crude remained above the $110 per barrel level, holding near recent highs despite slight pullbacks, supported by ongoing concerns over potential supply disruptions in the Middle East.

These movements come amid escalating military tensions in the Strait of Hormuz, a critical transit chokepoint through which roughly 20% of global oil supplies pass, increasing uncertainty in energy markets and limiting downside pressure on prices.

The lack of progress in diplomatic negotiations between Washington and Tehran has further reduced expectations for de-escalation, with analysts suggesting that the absence of a political agreement in the near term will continue to support oil prices at elevated levels.

Earlier gains had pushed oil prices close to multi-year highs before stabilizing, as markets remain highly sensitive to any new military or diplomatic developments in the region.

Looking ahead, investors are expected to closely monitor the trajectory of U.S.-Iran tensions, with oil prices likely to remain volatile and reactive to any signs of escalation or easing.

Dollar index stays firm, heading for a third straight gain

The U.S. Dollar Index (DXY), which measures the performance of the U.S. currency against a basket of major currencies, maintained its strength during Tuesday’s trading, heading toward recording a third consecutive session of gains, supported by increased demand for safe-haven assets amid ongoing geopolitical tensions.

The index rose to stabilize near the 98.5 level, continuing its gradual improvement following gains recorded in previous sessions. Data indicated that the dollar is receiving strong support from investor inflows seeking safe havens, particularly as tensions in the Middle East escalate.

Cautious sentiment in global markets and declining risk appetite have also contributed to enhancing the appeal of the U.S. currency, at a time when concerns over inflation and energy prices are rising, prompting investors to favor the dollar.

This positive performance comes despite continued volatility in major currency markets, where some competing currencies such as the euro and the British pound declined slightly, giving the dollar index additional support during today’s trading.

Analysts expect the upward trend of the index to continue in the short term, especially if geopolitical tensions persist and in the absence of clear signs of de-escalation, alongside market anticipation of key U.S. economic data that may influence the future path of monetary policy.

Looking Ahead

Markets are closely awaiting the release of two key U.S. economic indicators that could provide fresh signals on the health of the economy and future monetary policy direction. Investors are focusing on the U.S. JOLTS Job Openings report, which offers insight into labor market strength and demand for workers, as well as the U.S. ISM Services PMI, a crucial gauge of activity in the services sector that represents a significant portion of the economy. The results of these data releases are expected to influence market sentiment, particularly regarding expectations for interest rates and overall economic momentum in the United States.