The dollar index rose by 0.23% on Tuesday, driven by escalating hostilities between the US and Iran, which has increased crude oil prices and raised inflation expectations. The US and Iran exchanged strikes for the 10th consecutive day, with the US targeting military command centers in Iran and Iran attacking US military sites in Kuwait and Jordan. Amidst this, President Trump stated that the US will not engage in talks with Iran until they express a genuine interest in peace negotiations.
Crude oil prices surged by 2% to reach a 5-week high, negatively impacting the Eurozone economy and the euro, which fell by 0.11%. Conversely, the German July ZEW survey expectations of economic growth increased by 15.8 points to a five-month high of 26.3, surpassing expectations of 15.3. The yen also fell by 0.44% against the dollar, hitting a 39-year low as rising crude oil prices and higher U.S. Treasury yields weighed on the currency.
Gold increased by 1.51% to close at $60.50, and silver rose by 3.57%, reflecting safe-haven demand amidst ongoing geopolitical tensions. However, long holdings in gold and silver ETFs reached a 9.75-month low and a 1-year low, respectively, indicating bearish sentiment in the precious metals market despite strong central bank demand for gold.
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