In the week ahead: Core PCE Price Index, U.S. GDP, Powell Testimony

The EUR/USD pair declined during Monday’s Asian session, as the US dollar strengthened against the Euro amid a sharp escalation in Middle East tensions. The Greenback drew support after US President Donald Trump confirmed that the United States had entered the conflict between Israel and Iran, significantly intensifying the regional crisis.

Over the weekend, US forces launched coordinated strikes on three major Iranian nuclear facilities—Fordo, Natanz, and Isfahan. President Trump stated the sites had been “totally obliterated” and warned of even more severe action unless Iran agrees to peace negotiations. The surge in geopolitical risk has fueled demand for safe-haven assets like the US dollar, exerting downward pressure on the EUR/USD pair.

In the Eurozone, the European Central Bank (ECB) delivered its eighth interest rate cut of the year earlier this month to support a sluggish economic recovery. However, the central bank signaled it may pause further easing. ECB President Christine Lagarde noted that policymakers are now “in a good position” to navigate prevailing uncertainties, indicating that the current rate-cutting cycle may be nearing an end. This slightly hawkish stance could help limit losses for the Euro in the near term.

Market participants will continue to monitor developments in the Middle East closely, as geopolitical risks remain a key driver of global sentiment and currency flows.

Gold faced renewed selling pressure near the $3,400 level during Monday’s Asian session, failing to build on modest early gains. The precious metal remains under pressure as the US dollar opened with a bullish gap following a dramatic escalation in Middle East tensions. A hawkish tone from the Federal Reserve last week continues to weigh on non-yielding assets like gold, further limiting its upside potential.

The US launched targeted airstrikes on Sunday against three of Iran’s nuclear facilities—Fordo, Natanz, and Isfahan—marking a significant escalation in the conflict involving Israel and Iran. In response, Iran’s Foreign Minister Abbas Araghchi condemned the attacks, warning of severe and lasting consequences while pledging to defend the country by all means. US President Donald Trump responded by stating that any Iranian retaliation would be met with even greater force, underscoring the risk of a broader regional conflict.

These rising geopolitical tensions are bolstering demand for safe-haven assets, yet gold remains trapped within a narrow one-week trading range. Investor caution amid global uncertainty is limiting aggressive positioning, as markets await a clearer catalyst before committing to further directional moves.

Looking ahead, investors will closely watch Monday’s release of flash PMI data for fresh insights into global economic conditions. Alongside ongoing geopolitical developments, these figures could influence market sentiment and provide the next directional cue for gold prices. Additionally, US dollar movements will remain a critical factor in determining whether gold can break out of its current consolidation phase.

Oil prices rallied sharply in early Asian trading on Monday, driven by heightened fears of supply disruptions following U.S. military strikes on Iranian nuclear facilities. Although both Brent and WTI crude pared back some of their initial gains, the renewed geopolitical tensions kept energy markets on edge.

The initial rally was tempered by uncertainty over Iran’s response and the evolving stance of the U.S. administration toward a broader conflict with the Islamic Republic. The situation remains fluid, with markets closely watching for signs of further escalation.

Iranian media reported that the government is considering closing the Strait of Hormuz—a vital chokepoint through which a significant share of the world's oil and gas supplies transit.

A blockade of the strait would pose a major threat to global energy flows, intensifying concerns over regional stability and supply reliability. Early Monday reports also indicated that Iran had launched attacks against Israel, further inflaming tensions.

The conflict between Israel and Iran has now entered its 11th day, serving as a key driver for oil markets amid growing fears of broader regional fallout.

In addition to the potential for physical supply disruptions, market participants are wary of the possibility that Washington could impose fresh sanctions targeting Iran’s oil sector. Such measures could further constrain exports to Asia and Europe, tightening global supply conditions.

Investors now await Iran’s next move, with unconfirmed reports suggesting that U.S. military assets in the region could be potential targets. The evolving situation is expected to keep oil markets volatile in the near term.

U.S. equities ended mixed on Friday, with the US 500 slipping as losses in semiconductor stocks offset dovish comments from a key Federal Reserve official suggesting rate cuts could begin as early as the next policy meeting. Trading volumes remained subdued following Thursday’s Juneteenth holiday, with investors hesitant to make large moves amid rising geopolitical uncertainty.

Chipmakers were under pressure after reports indicated the Trump administration may tighten export controls on U.S. semiconductor equipment sent to China. Shares of Nvidia and Broadcom led sector losses following a Wall Street Journal article detailing plans to revoke waivers that currently allow certain U.S. tech exports to China.

A U.S. official told the Journal the move is intended to align with China's own licensing regime for rare-earth materials, and does not represent a fresh escalation in trade tensions. Still, the news raised concerns about further supply chain disruptions and regulatory headwinds for the sector.

On the macro front, comments from Federal Reserve Governor Christopher Waller helped ease some of the pressure on markets. Speaking Friday, Waller suggested that the Fed could cut interest rates as early as its July meeting, citing cooling inflation data and downplaying the potential impact of Trump’s proposed tariffs on consumer prices.

Markets also digested several central bank decisions during the week, including policy announcements from the Bank of England, Norges Bank, and the Swiss National Bank. A lack of clarity around global growth prospects—exacerbated by Trump’s unpredictable trade strategies—continued to influence investor positioning.

In corporate news, Apple is reportedly seeking Indian suppliers to manufacture components for its iPhones, according to Business Standard. The tech giant aims to ramp up production in India amid rising tariffs on China-based manufacturing. Apple has signaled plans to produce all U.S.-bound iPhones in India, though it will maintain some operations in China.