Gold prices slipped on Wednesday, as they continued to move within a bearish channel on the four-hour timeframe. The yellow metal is currently trading near the first support level at $4445, if it breaks below this level, the decline could extend toward the next support level at $4415. On the upside, if the price rises above the channel’s middle line, it may reclaim resistance levels at $4528 then $4563.
Financial markets remained on edge on Wednesday as geopolitical tensions in the Middle East intensified after the United States reportedly foiled Iranian attacks targeting Kuwait. The renewed hostilities fueled concerns over potential disruptions to regional energy supplies, pushing oil prices higher and supporting demand for safe-haven assets. As a result, the U.S. dollar held near a one-week high, with investors closely monitoring developments in the region alongside upcoming U.S. economic data for further direction.
Market Watch
U.S. foils Iranian attacks on Kuwait
The United States military said it successfully intercepted and neutralized multiple Iranian missile and drone threats aimed at Kuwait, as tensions between Washington and Tehran escalated across the Gulf region.
According to the U.S. Central Command (CENTCOM), Iran launched a series of missiles and drones targeting locations in Kuwait and Bahrain. U.S. officials stated that two Iranian missiles directed toward Kuwait failed to reach their intended targets, while additional aerial threats were intercepted by U.S. and allied air defense systems before causing significant damage.
The latest incident comes amid renewed hostilities between the United States and Iran, despite ongoing diplomatic efforts to preserve a fragile ceasefire. Kuwait’s state news agency reported that an Iranian drone and missile strike caused damage to Kuwait International Airport, forcing flight diversions and disrupting operations. However, U.S. military officials emphasized that several incoming threats were successfully neutralized, preventing a broader escalation.
In response to the attacks, U.S. forces carried out what they described as defensive strikes against Iranian military assets, including missile and drone facilities on Qeshm Island. CENTCOM stated that the operations were intended to protect U.S. personnel, regional partners, and commercial maritime traffic in the Gulf.
The exchange marks one of the most significant confrontations between the two countries in recent weeks and raises concerns about the security of critical infrastructure and shipping routes throughout the region. Market participants and regional governments are closely monitoring developments amid fears that further escalation could disrupt energy supplies and regional stability.
Oil rises as new Middle East hostilities flare
Oil prices climbed on Wednesday as renewed hostilities in the Middle East heightened concerns over potential supply disruptions and reduced hopes for a diplomatic breakthrough between the United States and Iran.
Brent crude futures rose more than 2% to around $98 per barrel, while U.S. West Texas Intermediate (WTI) crude advanced above $96 per barrel, reaching their highest levels in more than a week. The gains came after fresh military exchanges in the Gulf region, including Iranian missile and drone attacks targeting regional assets and subsequent U.S. retaliatory strikes.
According to U.S. military officials, several Iranian missiles and drones aimed at regional targets, including Kuwait and Bahrain, were intercepted or failed to reach their objectives. Meanwhile, U.S. forces conducted strikes against Iranian military positions near the strategically important Strait of Hormuz.
The latest escalation has renewed fears over the security of global energy supplies, particularly as traffic through the Strait of Hormuz remains severely disrupted. The waterway is one of the world’s most critical oil transit routes, handling a significant share of global crude exports.
Market sentiment was also supported by reports of a substantial decline in U.S. crude inventories, signaling strong demand ahead of the peak summer consumption season. Analysts noted that the combination of geopolitical risks and tightening oil supplies continues to provide upward momentum for energy prices.
Investors remain focused on developments in U.S.-Iran negotiations, which appear to have stalled despite recent efforts to secure a broader ceasefire agreement. Any further deterioration in regional security could increase volatility across energy and financial markets in the coming days.
Dollar holds near one-week high
The U.S. dollar remained close to a one-week high on Wednesday as investors continued to seek safe-haven assets amid renewed geopolitical tensions in the Middle East and growing uncertainty surrounding U.S.-Iran negotiations.
The U.S. Dollar Index (DXY), which measures the greenback against a basket of major currencies, traded near its strongest level in a week after gaining support from increased demand for defensive assets. Market sentiment remained cautious following fresh military exchanges between the United States and Iran, raising concerns over the potential impact on global economic growth and energy markets.
The dollar also drew support from expectations that the Federal Reserve may maintain a cautious approach toward interest rate cuts, particularly as recent U.S. economic data have pointed to continued resilience in the labor market and consumer spending.
Meanwhile, the euro and other major currencies remained under pressure as traders favored the relative safety of the dollar amid heightened market volatility. Analysts noted that any escalation in geopolitical tensions or stronger-than-expected U.S. economic data could provide additional support for the greenback in the near term.
Financial markets remain focused on both geopolitical developments and upcoming economic indicators, which are expected to play a crucial role in shaping currency movements over the coming days.