U.S. Considers Intervention in Iran-Israel Conflict, Commodities See Heightened Volatility

Market Overview

On Thursday, June 19, gold prices experienced sharp intraday swings, pressured by a hawkish tone from the Federal Reserve and escalating tensions in the Middle East. U.S. officials hinted at potential involvement in the Iran-Israel conflict, weighing heavily on U.S. equity futures and European stocks. Nasdaq futures briefly dropped over 1%. Meanwhile, the Fed signaled it is in no rush to cut rates this year, and the Bank of England kept its benchmark rate unchanged—both moves dampening risk appetite.

Geopolitical tensions triggered a rally in crude oil, with Brent prices surging more than 3% intraday and closing at their highest level in nearly five months. While the White House emphasized diplomatic efforts, it did not rule out a military response against Iran. The U.S. Dollar Index briefly turned negative. Spot gold, after hitting a one-week low, rebounded sharply as risk-off sentiment drove renewed safe-haven demand.

Hot Topics to Watch

● Freight Rates More Than Double in a Week

Following Israels strike on Iran, oil tanker rates through the Strait of Hormuz skyrocketed. Rates for Very Large Crude Carriers (VLCCs) surged from $19,998 to $47,609 per day—a staggering 138% jump. Shipping firms are avoiding the route or demanding sharply higher premiums due to geopolitical risk and navigation signal interference. Energy giants like Shell have admitted they are “exercising extreme caution” and have contingency plans in place for Middle East operations.

● Bank of England Holds Steady as Expected

The Bank of England held its policy rate unchanged at 4.25%, aligning with market expectations. However, the vote split was more dovish than anticipated—six members voted to keep rates unchanged, while three (Dhingra, Ramsden, and Taylor) favored a 25-basis-point cut. Meeting minutes suggested that wage growth is expected to slow significantly through the remainder of the year due to continued labor market slack. The committee also flagged rising disinflationary signals, stating the labor market is showing “further signs of downward pressure on inflation.” The BoE reiterated its forward guidance: any future rate cuts will be “gradual and cautious.”

Key Events to Watch(GMT+8)

• 20:30 GMT+2 – U.S. June Philadelphia Fed Manufacturing Index

• 22:00 GMT+2 – Eurozone June Preliminary Consumer Confidence Index