The repercussions of the continued Israeli aggression on the Gaza Strip and the assassinations of the head of the political bureau of the Islamic Resistance Movement (Hamas) Ismail Haniyeh and the military commander of Hezbollah, Fouad Shukr, raised gold prices during today’s trading, while oil prices stabilized after two sessions of increases.
gold
Gold prices rose on Thursday amid Middle East tensions and optimism over a U.S. interest rate cut, while traders awaited economic data for clues on the path the Federal Reserve will take.
Gold, considered a safe haven, rose 1% in spot transactions to $2,405.80 per ounce at the time of preparing this report, while US gold futures rose 0.36% to $2,441.40.
Longer-term market fundamentals appear supportive of gold, including geopolitical tensions in the Middle East and the downward trajectory of U.S. Treasury yields, said Kelvin Wong, senior market analyst for Asia-Pacific at OANDA.
Iranian President Masoud Pezeshkian told his French counterpart Emmanuel Macron that Iran would not remain silent over the aggression, amid fears of a wider conflict in the region after Haniyeh’s assassination in Tehran last week.
Benchmark 10-year Treasury yields fell, making non-yielding bullion more attractive.
Institutions including JP Morgan and Citigroup expect the US Federal Reserve to cut interest rates by 50 basis points in September after the US jobs report for July, which was published last week and was surprisingly weak.
Low interest reduces the opportunity cost of holding non-yielding bullion.
As for other precious metals, silver rose 1.24% to $26.95 per ounce, platinum rose 0.335 to $922.5, and palladium rose 1.4% to $894.75 at the time of writing the report.
Oil
Oil prices steadied on Thursday after two sessions of gains, as rising supply risks in the Middle East offset demand concerns that pushed prices to their lowest levels since early 2024 earlier in the week.
Brent crude futures were down 27 cents, or 0.38%, at $78.17 a barrel at the time of writing, while U.S. West Texas Intermediate crude was down 9 cents, or 0.12%, at $75.14.
Brent rose 2.4% and WTI rose 2.8% on Wednesday, their second straight session of gains, after sharp price declines on Monday when Brent and U.S. crude settled at their lowest levels since early January and early February, respectively.
Prices received a boost yesterday from a sixth straight weekly drop in US crude inventories of about 3.7 million barrels, compared to analysts’ expectations for a draw of 700,000 barrels.
“This suggests that oil demand remains strong despite concerns about weak economic activity,” analysts at ANZ Bank said in a note.
Prices were supported by rising tensions in the Middle East and the declaration of force majeure at Libya’s Sharara oilfield, the country’s largest producer, as of yesterday, five days after the field was shut down by protesters, said John Evans, an economist at PVM.
“The market is nervous waiting for Iran’s response,” ANZ Bank said in a note.
Analysts at Citibank expect Brent crude prices to recover to between $80 and $85 per barrel.
