Khaberni - Gold prices rose and oil prices fell on Wednesday amid market optimism about reaching an agreement between the United States and Iran following remarks by U.S. President Donald Trump concerning progress towards a comprehensive deal that could ease tensions in the Gulf region.
• The spot gold price rose 2.42% to $4666.57 an ounce by 06:30 GMT.
• U.S. futures for gold delivered in June also climbed 2.37% to $4677.20.
• Futures for Brent crude for July delivery fell 7.24% to $101.91 per barrel by 09:55 GMT, reaching the lowest level since April 23.
• West Texas Intermediate (WTI) crude dropped 8.4% to $93.84 per barrel.
Market movements came after the U.S. President announced that he would temporarily stop escorting ships through the Strait of Hormuz, indicating progress in negotiations with Iran, without revealing details of the potential deal.
Despite this, Trump confirmed the continuation of the U.S. naval blockade on Iranian ports, at a time when the Strait of Hormuz, through which about 20% of global oil and gas supplies pass, remains partially closed since the outbreak of the U.S.-Israeli war on Iran in February.
A Fragile Ceasefire
Kelvin Wong, chief market analyst at OANDA, told Reuters that the decline in oil prices has reduced the geopolitical risk premium, which supported the rise in gold, especially with the continuation of the fragile ceasefire between the United States and Iran despite recent clashes.
The U.S. dollar also faced pressure after Trump's remarks, boosting gains in precious metals, as a weaker U.S. dollar makes gold cheaper for holders of other currencies.
Investors are now awaiting the release of the non-farm payroll report in the United States this week, which will test whether the economy remains resilient enough to keep the Federal Reserve's (the U.S. central bank) monetary policy unchanged, or whether a downturn in the labor market might revive arguments for cutting interest rates.
Regarding Other Precious Metals
• Silver rose 2.7% to $74.80 an ounce.
• Platinum climbed 1.7% to $1986.25.
• Palladium increased 2.1% to $1516.44.
Meanwhile, market sources on Tuesday cited figures from the American Petroleum Institute indicating that U.S. crude oil inventories fell for the third consecutive week, as well as declines in gasoline and distillate stocks.
The sources stated that crude oil inventories fell by 8.1 million barrels in the week ending on May 1st.
They added that gasoline inventories dropped by 6.1 million barrels, and distillate stockpiles fell by 4.6 million barrels compared to the previous week.
