Gold dismissed its early gains and declined after reports that US President Donald Trump signed a trade agreement with Britain, while oil increased with support from the hopes of achieving a breakthrough in the talks between the United States and China.
gold
The price of gold in instant transactions fell 0.63% to 3342.96 dollars an ounce in the latest transactions, and the yellow metal increased by more than 1% earlier in the session.
US gold futures fell 1.34% to $ 3346.60 an ounce.
The New York Times reported that Trump is expected to announce a trade agreement between the United States and Britain on Thursday.
“In terms of trade agreements, any calm of the trade war and the decline in the atmosphere of ambiguity will have a negative impact on the yellow metal. But the US announcement of a trade agreement with the United Kingdom will have a positive impact on the global economy in general,” said Gigar Trevidy, a commodity analyst at Ryleins Sequiitez.
Trump hinted that China was the one who initiated the upcoming high -level trade talks between the two countries, and said he was not ready to reduce import fees on Chinese goods in order to attract Beijing to the negotiating table.
The Federal Reserve established interest rates on Wednesday, but said that the possibilities of high inflation and unemployment increased at a time when policymakers face the impact of the customs duties imposed by Trump.
Gold is usually seen as a hedging tool in times of political and economic ambiguity, and it refreshes when interest rates decrease.
On the geopolitical level, India launched an attack on Pakistan and its part of Kashmir on Wednesday, against the backdrop of the killing of tourists in Kashmir last month. Pakistan pledged to respond and said it had shot down 5 Indian aircraft.
“If (stress) escalates, we may witness the continued rise in gold and may break the previous high level that we have seen,” said Brian Lan, Administrative Director of Gold Silver Central in Singapore.
Gold recorded its highest level ever at $ 3500.05 on April 22.
As for other precious metals, its performance came as follows:
- Silver in immediate transactions fell 0.14% to $ 32.41 an ounce.
- Platinum settled at 979.31 dollars.
- Palladium fell 0.64% to 960.45 dollars.
Oil
In the latest transactions, Brent crude futures rose 70 cents or 1.15% to $ 61.82 a barrel, and US West Texas Intermediate crude rose 79 cents or 1.38% to $ 58.87 a barrel.
“Optimism about trade talks between the United States and China early next week is a basic factor that supports the oil market recovery,” said independent market analyst Tina Ting.
“Indicators led a possible calm of the trade war to improve morale in the market, which led to the recovery of oil prices in a market that witnesses the peak of sale,” she added.
US Treasury Secretary Scott Besent will meet with the chief Chinese economist on May 10 in Switzerland for negotiations on the trade war that shakes the global economy.
The disturbances resulting from the trade conflict between the two largest economies in the world are likely to lead to a decrease in the growth of crude oil consumption.
Donald Trump hinted on Wednesday that it was China who initiated trade talks, adding that he was not ready to reduce US customs duties on Chinese goods to encourage Beijing to negotiate.
Besent said the upcoming talks are just a beginning, not discussions “in an advanced stage.”
Fears of the weakening of the demand for oil price gains united after the Federal Reserve (the US Central Bank) kept interest rates unchanged, as it warned of the increasing state of economic blurring.
ING analysts said in a report issued today, Thursday, that the Federal Reserve “indicated that interest rates will be most likely to change until the effects of customs duties are clear. This is strengthened by the US dollar, which increased the challenges facing primary commodity markets in general.”
The strength of the dollar increases the cost of oil on other currencies, which weakens the demand.
Last week, gasoline stocks in the United States increased concerns about the poor demand, which fueled analysts’ concern that consumption was not increasing with the United States entering the summer demand period later this month.
At the same time, the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC Plus, will increase oil production, which increases the pressure on prices.
