Trump’s tariff hike now threatens to deepen these challenges. Higher trade barriers will likely further reduce China’s exports to the US. In turn, this may weaken Chinese factory output and increase pressure on its economy.
Iran-Israel Conflict Impact Safe-Haven Demand
Tensions in the Middle East escalated after Iran launched missiles at Israel, responding to Israeli strikes on nuclear facilities. The risk of broader regional war has surged. This uncertainty has rattled global markets.
Gold (XAUUSD) prices climbed on safe-haven demand. Meanwhile, the US dollar remains under bearish pressure, which boosts EUR/USD and keeps USD/CHF in a long-term downtrend. The spike in volatility followed a familiar pattern: stocks dropped, Treasuries gained, and gold rallied.
As fears mount, safe-haven assets may continue to outperform while risk-sensitive markets, such as equities, face downward pressure.
The G7 summit also focused on how geopolitical tensions could disrupt global supply chains, particularly in the energy and critical minerals sectors. Leaders expressed concern that prolonged conflict in the Middle East could drive WTI crude oil (CL) prices higher and strain efforts to control inflation. Rising energy costs would put more pressure on central banks, which are already struggling to strike a balance between growth and price stability.
US officials at the summit defended recent tariff measures as necessary for national interest. However, several allies warned that protectionist policies and regional wars could further fragment the global economy.
Iran Strikes Drive Rebound Toward $77 Resistance.
The monthly chart for WTI crude oil shows a strong rebound following Israel’s launch of strikes on Iran. This rebound has pushed the price toward the resistance level within the symmetrical triangle, located around the $77 area. However, the move reflects heightened volatility driven by the geopolitical crisis, which could lead to unpredictable price action in the coming weeks.
