Gold rebounded on Thursday after falling to a one-week low of $4,077 the previous session, as the price rose above the EMA (9) on the four-hour chart. The yellow metal is currently trading above the daily pivot point depicted at $4,078, where a penetration to the first daily resistance of $4,133 could trigger further rise towards the second resistance level of $4,190. On the downside, if the price falls below the pivot point, it may fall towards support levels of $4,021 then $3,965.
Financial markets remained focused on escalating geopolitical tensions after Iran responded to recent U.S. strikes, heightening concerns over potential disruptions to global energy supplies. The renewed uncertainty pushed oil prices to hover near their highest level in more than two weeks, reflecting a growing geopolitical risk premium. Meanwhile, the U.S. Dollar Index declined for a second consecutive session as investors balanced safe-haven demand against expectations for the Federal Reserve’s next policy moves, with market participants closely monitoring both geopolitical developments and upcoming U.S. economic data.
Market Watch
Iran Responds to Recent U.S. Strikes
Iran has responded to the recent U.S. airstrikes targeting military sites inside the country by launching missiles and drones at U.S. military facilities across the Gulf region, according to Iranian state media and military officials.
Iranian authorities described the operation as a “legitimate response” to the U.S. attacks, stating that the strikes targeted military installations used by American forces in the region. Meanwhile, the United States said its air defense systems intercepted several missiles and drones and that assessments of the damage are still underway.
The latest developments follow a new wave of U.S. strikes against Iranian military targets, marking a further escalation in regional tensions and raising concerns over the security of shipping through the Strait of Hormuz, one of the world’s most important oil transit routes.
Global markets are closely monitoring the situation amid concerns that the conflict could disrupt energy supplies and increase volatility in oil prices, while the international community continues to call for restraint and a return to diplomatic efforts.
Oil Prices Hover Near Their Highest Level in More Than Two Weeks
Oil prices hovered near their highest level in more than two weeks during Thursday’s trading, supported by renewed geopolitical tensions in the Middle East following the latest escalation between the United States and Iran, which heightened concerns over potential disruptions to crude supplies through the Strait of Hormuz.
Brent crude futures traded near $79 per barrel, while U.S. West Texas Intermediate (WTI) crude hovered around $74 per barrel, after both benchmarks recorded their strongest daily gains in several weeks.
The geopolitical risk premium continued to support energy markets as investors remained concerned that any further military escalation could disrupt oil shipments through the Strait of Hormuz, a key transit route for nearly one-fifth of the world’s seaborne oil exports. The heightened tensions also reinforced expectations of persistent global inflationary pressures, potentially encouraging major central banks to maintain tighter monetary policies for longer.
Market participants will continue to monitor geopolitical developments closely, alongside any signs of disruption to oil flows from the Gulf region, as these factors are expected to play a key role in determining crude price movements in the coming days.
U.S. Dollar Index Declines for a Second Consecutive Session
The U.S. Dollar Index declined for a second consecutive session on Thursday as investors assessed the minutes from the Federal Reserve’s latest policy meeting, which revealed differing views among policymakers regarding the future path of interest rates. Market participants also remained focused on upcoming U.S. economic data for further policy guidance.
The greenback weakened after reaching its highest level in nearly a week, with traders taking profits amid heightened caution over ongoing geopolitical tensions in the Middle East. Meanwhile, the euro and the British pound posted modest gains, while the Japanese yen remained near multi-decade lows.
Despite the dollar’s decline, escalating tensions in the Gulf region and higher oil prices continued to support demand for safe-haven assets and reinforced expectations that the Federal Reserve may maintain a restrictive monetary policy for longer, limiting further downside in the U.S. currency.
Investors will continue to monitor geopolitical developments alongside upcoming U.S. economic releases for fresh signals on the timing and magnitude of any future Federal Reserve policy moves.
Looking Ahead
Markets are awaiting today’s release of the U.S. Initial Jobless Claims report and a speech by FOMC member John Williams, both of which could provide fresh insights into the strength of the U.S. labor market and the Federal Reserve’s policy outlook. Investors will closely assess the unemployment data for signs of labor market resilience, while Williams’ remarks may offer further guidance on the future path of interest rates, potentially influencing expectations for upcoming monetary policy decisions and driving volatility across currency, equity, and commodity markets.