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Spot gold and silver extended gains today as escalating geopolitical tensions in the Middle East revived safe-haven demand. Bullion prices surged yesterday with gold briefly testing $5,020/oz and silver touching intraday highs of $79.50, driven by rising concerns over a potential U.S.–Iran conflict. Tensions intensified following comments from President Trump and reports of an expanded U.S. military presence in the region, the largest deployment since the Iraq invasion. However, gains were partially capped by a firmer U.S. dollar. Gold retreated to settle below the $5,000/oz mark, while silver eased toward $78.50 as dollar index climbed to a three-and-a-half-week high of 98.1 after weekly jobless claims fell to 206K and the Philadelphia Fed Business Outlook jumped to 16.3, both reinforcing signs of economic resilience.

Currently, gold has rebounded above $5,020/oz, while silver has surged past $81/oz as markets continue to weigh geopolitical risks against evolving Federal Reserve policy expectations. Investors remain cautious ahead of key economic releases, including PCE inflation, Q4 GDP, and flash PMI data. A softer-than-expected inflation reading could boost expectations for additional rate cuts later this year, supporting bullion prices. Conversely, a hotter inflation print may reinforce higher-for-longer rate expectations, potentially capping further upside in precious metals.

WTI crude oil edged lower to around $66.30/bbl after touching a fresh six-month high of $67.05/bbl earlier in the session, as traders adopted a cautious stance amid a shortened diplomatic timeline and escalating U.S.–Iran tensions. Oil prices climbed to $66.90/bbl yesterday after President Trump reportedly issued a 10–15 day deadline for Iran to reach an agreement over its nuclear program. The continued buildup of U.S. military presence in the region has heightened concerns about a potential military strike. Market participants are closely monitoring the risk of disruption to the Strait of Hormuz, a critical chokepoint that handles roughly one-third of global seaborne oil supply. Any blockade or supply interruption would significantly tighten global balances. Providing additional support, the EIA reported an unexpected 9 million-barrel draw in U.S. crude inventories, largely reversing the previous week’s 8.5 million-barrel build. Gasoline inventories declined by 3.2 million barrels, while distillate stocks fell by 4.6 million barrels, indicating firm underlying demand.

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