Escalating tensions in the Middle East continue to put pressure on markets. Silver reaches 13-year high

The US stocks fell on Tuesday as investors closely monitored escalating tensions in the Middle East, where the Israeli-Iranian conflict has been ongoing for five days. At the end of the trading day, the Dow Jones (US30) Index fell by 0.70%. The S&P 500 (US500) Index fell by 0.84%. The Nasdaq (US100) Technology Index closed lower by 0.91%. President Trump stepped up his rhetoric, demanding Iran’s « unconditional surrender » and warning of a possible strike against Supreme Leader Khamenei in a series of posts on the Truth social network.

At the same time, disappointing US retail sales data, which fell by 0.9% in May, signaled a slowdown in consumer growth, and that tariffs may have a huge impact on the economy.

Today, Federal Reserve officials will give their views on the future path of interest rates, as well as how tariffs and unrest in the Middle East will affect the economy. Although an immediate change in interest rates seems unlikely, the Fed meeting, which ends on Wednesday, will provide important signals that could still influence the markets. Among the most significant points to watch will be whether Federal Open Market Committee members stick to their previous expectations of two rate cuts this year.

Minutes from the meeting show that earlier this month, senior Bank of Canada officials considered the possibility of lowering interest rates. The main source of uncertainty — and the biggest threat facing the Canadian economy — is the trade conflict initiated by the United States. The Bank of Canada’s next interest rate decision is scheduled for July 30.

Stock markets in Europe were mostly lower on Tuesday. The German DAX (DE40) fell by 1.12%, the French CAC 40 (FR40) closed down 0.76%, the Spanish IBEX35 (ES35) lost 1.41%, and the British FTSE 100 (UK100) closed down 0.46%.

WTI oil prices rose by 4.3% to $74.8 per barrel on Tuesday as escalating tensions between the US and Iran reignited concerns about supplies. US President Donald Trump demanded Iran’s « unconditional surrender » and directly threatened Supreme Leader Ayatollah Ali Khamenei. According to Goldman Sachs, any attempt by Iran to block the Strait of Hormuz, a key point on the global oil supply route, could lead to a sharp rise in prices above $100.

On Wednesday, silver prices rose above $37.20 per ounce, reaching their highest level since 2012, driven by high industrial demand, persistent supply shortages, and increased purchases of the safe-haven metal amid geopolitical uncertainty. The expanding use of this metal in solar energy, electronics, and broader electrification trends now accounts for more than half of global demand, reinforcing its long-term structural importance. On the supply side, the silver market has been in deficit for the fifth consecutive year.

Asian markets traded without a single trend yesterday. Japan’s Nikkei 225 (JP225) rose by 0.59%, China’s FTSE China A50 (CHA50) added 0.01%, Hong Kong’s Hang Seng (HK50) fell by 0.34%, and the Australian ASX 200 (AU200) showed a negative result of 0.08%.

In New Zealand, attention this week is focused on the first quarter GDP report, which will be released on Thursday. Analysts expect the economy to expand by 0.7% on a quarterly basis but contract by 0.8% on an annual basis. On the policy front, the Reserve Bank of New Zealand has already signaled that its aggressive easing campaign is coming to an end, and markets are expecting a final rate cut later this year.

The Australian dollar strengthened to $0.649 on Wednesday, recouping some of the previous session’s losses, as rising oil prices caused by heightened geopolitical tensions supported demand for commodity-linked currencies. Market jitters intensified as the conflict between Israel and Iran entered its sixth day and President Trump demanded Iran’s unconditional surrender and hinted at possible US intervention. In response, oil prices continued to rise, supporting the Australian dollar, as it is strongly correlated with commodity markets.