Oil Rises and Gold Declines as US President Trump Rejects Iran's Proposal
While the US administration's rejection of Iran's proposal stirred energy markets, inflation concerns pulled precious metals down.
Following US President Donald Trump's rejection of Iran's proposal, oil prices increased by over 1 percent, while gold prices declined due to inflation concerns and expectations of a Federal Reserve rate hike.
Rise in Oil Prices
The barrel price of Brent crude rose by 2.6 dollars to reach 107 dollars following the opening of Asian markets. Meanwhile, the barrel price of US West Texas Intermediate crude reached 94 dollars.
Rejection of Iran's Proposal
Iran announced that it had presented a proposal at the United Nations General Assembly to end the war and reopen the Strait of Hormuz. However, US President Donald Trump announced that he rejected this proposal.
Geopolitical Risks and Attacks
ANZ Bank analysts stated that geopolitical risks remain at high levels. Attacks by the Houthis and Iran targeting Saudi Arabia are putting global oil supply routes at risk.
Decline in Gold Prices
As the increase in oil prices triggered inflation concerns and strengthened expectations of a Fed rate hike, spot gold dropped to 4,198.10 dollars per ounce.
Market Expectations and Data
Investors will monitor employment and inflation data to be released in the US this week. It is stated that data coming in above expectations could increase bond yields.
Other Precious Metals
In parallel with the drop in gold, spot silver decreased by 2.6 percent to 62.64 dollars, platinum fell to 1,741.45 dollars, and palladium declined to 1,239.95 dollars.