Gold & Silver Jump on Iran Attacks & Hot EU Inflation

Session Summary: Geopolitical Momentum and Macroeconomic Data

The closing session in Western markets was marked by a renewed escalation of geopolitical tensions in the Middle East, which propelled precious metals like gold and silver to closing highs. News that the United States and Israel have attacked nuclear targets in Iran, along with France and Great Britain's plan to escort warships in the Strait of Hormuz, has intensified the perception of risk, strengthening demand for safe-haven assets like gold. The breach of the FBI director's personal email by hackers linked to Iran adds an extra layer of concern regarding cybersecurity and state-sponsored operations.

Concurrently, European inflation data has shown greater persistence than expected, sparking debate over the European Central Bank's (ECB) monetary policy. While ECB member Isabel Schnabel has indicated there is no rush to adjust rates in response to the war in Iran, underlying inflation could keep the central bank on alert, indirectly benefiting metals.

Closing Levels and Intraday Variations

* **Gold (XAU):** $4546.70 USD/oz (+3.12%) - Continued its ascent from the opening, surpassing significant psychological levels.

* **Silver (XAG):** $70.39 USD/oz (+3.62%) - Experienced strong momentum in the latter half of the session, outperforming gold in percentage terms.

* **Platinum (XPT):** $1880.60 USD/oz (+1.25%) - Showed solid gains, though moderate compared to gold and silver.

* **Palladium (XPD):** $1394.50 USD/oz (+2.70%) - Significantly recovered ground during the afternoon.

* **Copper (HG):** $5.48 USD/oz (+0.00%) - Remained stable, not reflecting geopolitical tensions in the same way as precious metals, indicating solid but contained industrial demand.

Causes and Market Factors

The primary driving force of the session has been the intensification of the geopolitical crisis in the Middle East. The possibility of a wider conflict in the region increases demand for gold as a safe-haven asset and as a hedge against global economic uncertainty. The intervention of France and Great Britain in the Strait of Hormuz, a critical point for energy supply, raises concerns about the stability of global supply chains, which is also reflected in the strength of silver, which has both industrial and safe-haven components.

European inflation data, while not entirely new, has reaffirmed the idea that inflationary pressures could persist, limiting central banks' ability to aggressively loosen monetary policy. This creates a favorable environment for precious metals, as real interest rates (nominal minus inflation) could remain low or even negative.

The news regarding BYD, an electric vehicle giant, experiencing its first profit drop since 2021, despite leading the global market, did not have a direct and significant impact on industrial metals during this session, but it does underscore the complexity of supply chains and global competition in key sectors.

Outlook for Tomorrow: What to Watch?

Investors will continue to closely monitor the evolving geopolitical situation in the Middle East. Any escalation or de-escalation will have a direct impact on precious metal prices. The release of relevant macroeconomic data in the United States and Europe over the weekend will also be crucial. Additionally, any statements from members of the Federal Reserve or the ECB regarding their monetary policy outlook will be analyzed with attention. The strength of the US dollar and the performance of Treasury yields will also be key indicators to observe.

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