Risk-off sentiment returned to US equities overnight, with all major indices closing lower: the declined 0.8%, the 100 fell 1%, the shed 0.7%, and the dropped 1%.
Trump’s Threat to Iran Sparked Renewed Middle East Tensions
The catalyst for the sell-off was a renewed escalation in geopolitical tensions after US President Trump posted a stark demand on social media, calling for Iran’s “unconditional surrender” and warning of a potential strike on the country’s leadership. These remarks have raised the probability of direct US involvement in Israel’s ongoing conflict with Iran.
surged sharply on fears of supply disruptions, as markets speculated Iran could respond by blocking the Strait of Hormuz—a critical chokepoint for global oil flows—as an indirect countermeasure. WTI crude oil rallied 5.3% on Tuesday, 17 June, recovering all of Monday’s losses and retesting last Friday’s swing high at US$76.20/barrel.
Higher oil prices may jeopardize the Fed’s upcoming plan of cuts
Persistently higher oil prices could complicate central banks’ efforts to use accommodative monetary policy to support growth in the face of global trade tensions, especially for the US Federal Reserve, which has paused its rate cut cycle since the beginning of the year. Market attention now turns to the upcoming FOMC decision, updated economic projections via the “dot plot,” and Fed Chair Powell’s press conference later today.
GBP Was the Worst Performer, but GBP/USD Remained Above its 50-Day Moving Average
The strengthened broadly on Tuesday, with the the hardest hit among major currencies. The greenback gained 1.1% against the GBP and rose 0.7% on the . However, the index remains below its 20-day moving average, currently acting as near-term resistance around the 99.00 level. GBP/USD, meanwhile, is nearing its 50-day moving average support at 1.3370 ahead of key UK data.
Rotation Plays Among Precious Metals
Gold () underperformed despite rising geopolitical tensions. After peaking at US$3,452 last Friday, it has since declined 2.5% to a low of US$3,366 yesterday, although it still holds above the 20-day moving average support at US$3,350.
In contrast, Silver () surged 3.5% over the same period, reaching an intraday high of US$37.26 on 17 June. This divergence suggests short-term positioning shifts, as traders rotate out of Gold into previously lagging precious metals, like Silver.
Economic Data Releases
Fig 1: Key data for today’s Asian mid-session (Source: MarketPulse)
Chart of the Day – Potential Bullish Acceleration for Silver (XAG/USD)
Fig 2: Silver (XAG/USD) minor to medium-term trends as of 18 June 2025 (Source: TradingView)
Since its bullish breakout from a medium-term multi-month “Symmetrical Triangle” range configuration on 5 June 2025, the price movements of Silver (XAG/USD) have accelerated and hit a 13-year high of US$37.12 on Tuesday, 18 June.
In addition, the 4-hour MACD trend indicator has continued to trend upwards steadily above its centreline since 17 June, which suggests that the short-term uptrend phase of Silver (XAG/USD) remains intact (see Fig 2).
Also, the ratio chart of Silver against Gold suggests a further outperformance of Silver over Gold at least in the short term. These observations suggest that the current minor to medium-term uptrend phases of Silver (XAG/USD) have been in place since the 7 April 2025 low of US$28.31 may still have further room to run.
Watch the US$35.90 short-term pivotal support with the next intermediate resistances coming in at US$37.77/38.30 and US$39.08.
On the other hand, failure to hold at US$35.90 support negates the bullish tone to see a minor corrective decline to expose the next intermediate support at US$34.76 (also the 20-day moving average).