On Tuesday, as the conflict between the U.S. and Hamas reached its 151st day and retaliatory strikes were temporarily paused, both the Iran and Ukraine wars remain unresolved. U.S. President Donald Trump is hosting Israeli Prime Minister Benjamin Netanyahu and Ukrainian President Volodymyr Zelenskiy, with each conflict at a critical stage and his relationships with both leaders notably distinct.
fell modestly, as the U.S. dollar strengthened to near one-month highs. At the same time, investors awaited the Federal Reserve’s policy decision and Chair Kevin Warsh’s comments for clues on the outlook for interest rates.
Both the war in Ukraine and the widening conflict in the Middle East are at critical junctures. After the collapse of a ceasefire in the Iran war, Trump says he has paused U.S. airstrikes to give diplomacy another chance.
Meanwhile, Zelenskiy has been buoyed by Ukraine’s recent successes, and relations with Zelenskiy have warmed as Ukraine has blunted Russian advances, while Netanyahu arrives amid growing White House frustration over the lack of progress toward a broader settlement in the Iran conflict and criticism from some of Trump’s supporters who oppose deeper U.S. involvement in the Middle East.
Today, both men are in Washington to attend a memorial service for Senator Lindsey Graham, a hawkish Republican who was one of Trump’s closest allies and who frequently tried to coax Trump into providing more support for Ukraine’s war.
Zelenskiy said that anti-ballistic defense and strategic cooperation with the U.S. were the “number-one priority” for meetings with Trump and his team, as he arrived in Washington.
Undoubtedly, Netanyahu has run hot and cold with Trump, who at times has had to rein in the Israeli leader from attacking targets in Lebanon to try to weaken Iran-backed Hezbollah militants.
I find that despite the strained relationship between President Trump and Netanyahu in June, this meeting seems to be only a showcase of what has traditionally been a close relationship between the two leaders, which could help Netanyahu at home where he is struggling in the opinion polls.
“In these complex times, you need to act with both great determination and great wisdom. We will discuss all the issues on the agenda, primarily Iran,” Netanyahu said in a video statement as he departed for Washington.
“Of course, our goal is to protect our security and also to expand the circle of peace around us.”
A White House official said Trump would discuss the conflict in Iran, as well as tensions between Israel and Lebanon, whose president Trump hosted last week.
Moreover, Trump wants to add Saudi Arabia to the accords and conditioned a civilian nuclear cooperation deal with the kingdom last week on Riyadh signing up. Riyadh has so far rejected joining the accords without a path toward Palestinian statehood.
On the other hand, Zelenskiy and Trump clashed repeatedly in the early months of Trump’s second term, but relations between the two have improved in recent months as Ukraine has had greater success in the war, including with increased attacks on Russia’s oil industry.
Zelenskiy is expected to press Trump for urgently needed air defense capabilities and to complete a drone deal with the United States. The two leaders will also likely discuss Trump’s promise at the NATO summit to grant Ukraine a license to produce Patriot interceptors.
I find that the next two days could be critical for the markets, as the whole scenario of growing hopes for de-escalation of the Iran war, as Netanyahu could try to influence Trump’s changing stance towards a diplomatic way to deal with the Iranian issue.
Gold Futures, after opening the day at $4,073.10, tested the day’s high at $4,073.30 and the day’s low at $4,034.60, is trading at $4,048, signaling weakness, and could break down below the key support at $3,980, where a sustainable move could push the futures to test the next key support at $3,956.
I conclude that gold remains trapped in a broad range as investors await clearer guidance from the central bank, while Netanyahu is set to disrupt Trump’s diplomatic efforts to resolve the Iran War. The U.S. and Iran maintained a pause in hostilities after halting strikes over the weekend, easing fears of supply disruptions and offering some relief to inflation expectations.
Oil prices extended sharp losses in Asian trading on Tuesday, alleviating energy-driven inflation worries. Markets have priced in roughly a 30% probability of a rate increase following the recent jump in .
Markets are divided ahead of Wednesday’s Federal Reserve decision as higher oil prices have fueled speculation of a rate hike.
Disclaimer: Readers are advised to take any position in gold at their own risk, as this analysis is based solely on observations.
