Khaberni - The global markets witnessed a mixed start to the week, as oil prices climbed in early Monday trading, buoyed by hopes for a trade agreement between the United States and China, while gold prices fell under the pressure of a strong dollar and easing trade tensions between the world's two largest economies.
Brent crude futures rose 46 cents, or 0.7%, to $66.40 a barrel, while West Texas Intermediate (WTI) U.S. crude futures climbed 46 cents or 0.75% to $61.96 a barrel, after strong gains last week, which saw about 9% for Brent and 7.7% for U.S. crude, driven by new Western sanctions on Russia.
Haitong Securities stated that market sentiment improved due to sanctions imposed on Moscow and reduced tensions between Washington and Beijing, which alleviated fears about a supply glut that negatively affected prices at the beginning of the month.
U.S. Treasury Secretary Scott Pilsent confirmed that economic officials from both countries reached "a very substantial framework of a trade deal" during a meeting in Kuala Lumpur, indicating that this framework will allow President Donald Trump and his Chinese counterpart Xi Jinping to discuss trade cooperation details later in the week.
Pilsent explained that the agreement would avert imposing U.S. tariffs of 100% on Chinese goods and delay implementing China's export controls on rare earth metals, which boosted risk appetite and raised oil prices.
Conversely, gold prices fell with the rise of the dollar and improved investor appetite for high-risk assets. The precious metal spot deals dropped 0.5% to $4092.76 per ounce, while U.S. futures gold contracts for December delivery fell by 0.7% to $4106.80 per ounce.
Gold prices declined concurrently with the dollar rising to its highest level in more than two weeks against the yen, making the precious metal more expensive for other currency holders. Investors are also anticipating the American Federal Reserve meeting on Wednesday, amid expectations of a quarter-point interest rate cut, which could determine the next direction for gold in the markets.
Gold typically rises during periods of lower interest rates, while oil benefits from any positive indications of global growth and increased demand for energy.
As for other precious metals, silver declined by 0.3% to $48.44 per ounce, while platinum rose 0.5% to $1612.95, and palladium increased 0.2% to $1431.94 per ounce.
