Oil prices rose and gold prices declined today, Monday, after the United States and China announced a reduction in their customs fees.
The agreement enhances the market confidence that the two largest consumers of crude oil in the world may head towards resolving their trade dispute.
Oil
Brent crude futures rose $ 1.85, or 2.91% to $ 65.78 a barrel, and US West Texas Intermediate crude futures rose $ 1.89, or 3.13% compared to a settlement price last Friday to $ 62.95 a barrel.
Washington and Beijing announced today, Monday, to reduce counter -tarit duties as part of their endeavor to end the trade war that confused the global economy and raised the concern of financial markets.
US Treasury Secretary Scott Bessent told reporters after talks with Chinese officials in Geneva that the two sides had reached an agreement to suspend counter -procedures for a period of 90 days, adding that customs duties will decrease by more than 100% to 10%.
The two crudes rose by more than a dollar last Friday, and they increased by more than 4% last week, in their first weekly gains since mid -April after investors optimistic about an American trade agreement with Britain that the economic turmoil caused by US customs duties on its commercial partners.
The United States and China concluded positively trade talks on Sunday, and US officials talked about a “agreement” to reduce the American trade deficit, while Chinese officials said that the two sides had a “important consensus.”
Positive talks between the two largest economies in the world may help enhance the demand for crude oil with the resumption of trade between them, which were disrupted by the large customs duties imposed by the two countries.
Tositaka Tazawa’s analyst at the Petroleum Exporting Organization (OPEC) to increase production has limited the gains.
Tazawa refers to OPEC’s plans and allies, or what is known as the OPEC Plus coalition, to accelerate production increases in May and June, which will add more crude to the market.
However, a Reuters survey revealed that OPEC’s oil production decreased slightly last April.
In addition, officials said that the talks between Iranian and American negotiators to resolve differences on Tehran’s nuclear program ended in the Sultanate of Oman on Sunday, with planning to conduct more negotiations, and Tehran insisted publicly on continuing uranium enrichment.
Any nuclear agreement between the United States and Iran may reduce concerns about the low global oil supply, which may also pressure oil prices.
Baker Hughes Energy Services said last Friday that last week US energy companies reduced the number of natural oil and natural gas platforms to the lowest level since last January.
gold
Gold prices fell by more than 3% to the lowest level in more than a week today, Monday, after the United States and China agreement, which prompted the dollar to rise and the weakest of the yellow metal, which is a safe haven.
The price of gold in instant transactions fell 3.2% to 3218.32 dollars an ounce in the latest transactions, its lowest level since May 1, and US gold futures declined 3.72% to 3219.5 dollars.
“Reducing tension between China and the United States and reducing customs duties for a period of 90 days reduces demand for safe assets such as gold,” said Giovanni Stonovo at UBS.
“The prices are likely to remain volatile in the short term, but the high customs duties still negatively affect economic growth, and the central banks are likely to have to reduce interest rates more later this year, and the central banks may take advantage of this decline in prices to increase their investments.”
In a great calm of the trade war, the United States and China said they had reached an agreement to reduce mutual customs duties, as Washington and Beijing seek to end a trade war that confused the global economy.
The United States and China imposed mutual customs duties last month, which led to the outbreak of a commercial war that fueled fears of global recession.
Meanwhile, the dollar index jumped more than 1% against other major currencies, making gold more expensive for other currencies.
Gigar Trevidy, chief of primary commodity analysts in “Ryleins Sequiitez”, said that gold is expected to decline with the possibility of the value of the dollar, and the decrease in geopolitical risk may “harm the demand for safe haven, and the yellow metal may decline to $ 3,200 an ounce in the near term,” said Gigar Trevidy, senior commodity analyst at Ryleins Sequiitez.
Traders are also awaiting US consumer price index data tomorrow, Tuesday, to obtain new indicators on the path of the monetary policy of the Federal Reserve (US Central Bank).
The performance of other precious metals came as follows:
- Silver in instant transactions fell 1.89% to $ 32.10 an ounce.
- Platinum fell 1.48% to 983.31 dollars an ounce.
- Palladium fell 1% to $ 969.66 an ounce.
