Heightened geopolitical tensions in the Middle East have once again rattled financial markets. On the 3rd, local time, escalating military conflict between the US and Iran, with potential to draw in more Gulf nations, spurred a surge in investor anxiety. This sentiment was reflected in a significant rise for international oil prices during the European trading session.

As of 17:22 Beijing time on the 3rd, the price for the July delivery light crude oil futures contract on the New York Mercantile Exchange was quoted at $96.31 per barrel, marking a gain of 2.70%.

Concurrently, the price for the August delivery Brent crude futures contract on the London market stood at $98.56 per barrel, representing an increase of 2.65%.

Market Analysis of the Price Drop

Market participants are concerned that the ongoing Middle East conflict could lead to prolonged disruptions in traffic through the strategic Strait of Hormuz. Sustained high energy prices are seen as a factor that could push inflation levels higher. This outlook has increased market expectations for another potential interest rate hike by the US Federal Reserve within the year, with the probability now estimated at approximately 42%. Consequently, the yield on the 10-year US Treasury note edged higher, applying downward pressure on precious metal prices. This resulted in a simultaneous weakening for both international gold and silver prices.

As of 17:22 Beijing time on the 3rd, the price for the August delivery gold futures contract was quoted at $4,477.90 per ounce, reflecting a decline of 0.93%.

The price for the July delivery silver futures contract was reported at $74.570 per ounce, showing a decrease of 1.30%.