The dollar index (DXY00) remained stable on Friday, bolstered by a 2.2 basis point rise in the 10-year T-note yield but facing downward pressure amid reduced safe-haven demand due to potential US-Iran peace talks. Preliminary reports suggest a peace agreement could be signed this weekend, potentially reopening the Strait of Hormuz and addressing sanctions and frozen assets totaling $24 billion.
Key economic indicators included the University of Michigan’s June Consumer Sentiment Index, which rose to 48.9, exceeding expectations of 46.0. However, 1-year inflation expectations dropped from 4.8% to 4.6%, while 5-10 year expectations fell from 3.9% to 3.4%. The swaps market currently assigns a 4% chance for a 25 basis point rate hike at the upcoming FOMC meeting on June 16-17.
Gold and silver prices increased on Friday, with gold up 3.03% and silver up 6.21%, following previous lows and supported by strong central bank demand, notably a 320,000 ounce increase in China’s PBOC gold reserves to 74.96 million troy ounces. However, bearish factors included higher US T-note yields and muted safe-haven demand amid the prospect of an US-Iran accord.
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