Gold Soars as Dollar Tumbles, Yields Sag

Metals

Gold prices hit a fresh six-year high during the Asian session as the dollar drifted lower along with US Treasury yields. The price of a gold ounce was finding heavy resistance near $1360 area for the past couple of years. However, the latest shift in the Fed's tone towards monetary policy boosted the demand for the bullion, which was able to breach the key resistance area and trade well above it. On the other hand, the escalating geopolitical tensions, especially between the United States and Iran, sparked the demand for safety, and the precious metal is well-known for its safe-haven status during times of high market risks and uncertainties. The gold bullion rose to a high of $1438, the highest since May 2013, while the silver and palladium hovered near $15.40 and $1530, respectively.

USD

The dollar index which measures the greenback against a basket of major currencies extended losses, falling to a fresh three-month low of 95.84. The latest swing lower started when the Federal Reserve opened the room for interest rate cuts in the coming meetings to support the recent economic expansion. Market participants are looking forward to a speech for the Federal Reserve Chairman Jerome Powell about the economic outlook and monetary policy in New York. The US 10-year yields dropped to 1.989%, the USDJPY tumbled to 106.79, the lowest since early January, and the EURUSD hovered around $1.1400.

Oil

Oil prices held steady near a three-week high supported by the geopolitical tensions and OPEC+ supply-cut deal extension. OPEC will meet on July 1st and OPEC+ will sit on the 2nd to discuss an extension for the supply-cut deal agreed on in December. The West Texas Intermediate crude futures traded at $57.95, and Brent futures steadied at $64.60.

Major Economic Events

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