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 Global markets experienced severe tension today, Thursday, following a sharp escalation in the military standoff between the United States and Iran. This geopolitical friction directly impacted oil, gold, and major currency prices amid growing fears over the wider conflict's broader economic fallout, sticky inflation, and prolonged high interest rates.

Crude Prices Surge Amid Supply Shock Oil prices jumped by over 3% after Iran's Revolutionary Guard Corps (IRGC) announced targeting a US airbase. The attack came in response to an earlier US strike near Bandar Abbas airport. Brent crude futures rallied to approximately $97.8 per barrel, while US West Texas Intermediate (WTI) crude climbed close to $92 per barrel.

This sharp rebound reversed a previous session that saw oil plummeting by over 5% on short-lived hopes of a diplomatic breakthrough between Washington and Tehran that could reopen the Strait of Hormuz. However, the latest battlefield developments quickly erased those expectations. Additionally, American Petroleum Institute (API) data showed US crude inventories dropped by 2.8 million barrels for the sixth consecutive week, aggravating fears of tightening global supplies.

Gold Slums and US Dollar Strengthens In the precious metals market, gold tumbled to a two-month low as a surging US dollar and rising energy costs raised alarms over renewed inflationary pressures. Spot gold slid 1.7% to hover around $4,380 per ounce, while US gold futures dropped 1.6%. Silver, platinum, and palladium also suffered notable losses. Analysts noted that geopolitical uncertainty paradoxically pushed investors toward the US dollar as the ultimate safe haven, given the fading prospects of a political settlement.

Concurrently, the dollar stabilized near a one-week high, bolstered by bets that the US Federal Reserve might prolong its hawkish monetary policy to combat energy-driven inflation. Conversely, the Japanese Yen edged closer to the critical 160-yen per dollar threshold—a level that previously triggered direct currency intervention by Tokyo. The Euro and British Pound also ticked slightly lower against the greenback, as market participants anxiously await the upcoming US Personal Consumption Expenditures (PCE) data to gauge the Fed's next interest rate trajectory.