Oil Prices Fall, Gold Rises as Iran War Fears Subside
Translated & summarized from Arab48 by baba
Oil prices fell on Monday as U.S. President Donald Trump largely dismissed the possibility of new attacks on Iran, easing energy supply concerns. Gold prices, however, rose over 1% as lower oil prices reduced inflation fears and the U.S. dollar weakened. Trump's comments followed earlier threats of military action, while Iran vowed retaliation. Markets are watching for sustained policy shifts amid economic data and interest rate hike expectations.
The story in 7 lines · by baba
- Oil prices declined as President Trump downplayed the likelihood of new attacks on Iran.
- Gold prices rose over 1% on Monday, driven by lower oil prices and a weaker dollar.
- Brent crude futures fell to $97.48 a barrel and WTI crude to $90.51 a barrel.
- Trump's statements followed earlier threats of military operations against Iran.
- Iran stated it would retaliate against any escalation by targeting U.S. and Israeli sites.
- Gold prices have gained about 5% over the past week.
- Expectations for a U.S. interest rate hike in December increased to 79%.
Oil prices declined at the start of trading on Monday, influenced by statements from U.S. President Donald Trump who largely ruled out new attacks on Iran. This eased concerns about energy supply disruptions, despite reports from Washington and Tehran of attacks targeting ships in or near the Strait of Hormuz. Brent crude futures fell 84 cents, or 0.85%, to $97.48 a barrel, while West Texas Intermediate crude dropped 32 cents, or 0.35%, to $90.51 a barrel by 01:38 GMT. These drops erased modest gains from Friday's settlement as investors assessed the possibility of renewed U.S. strikes on Iran. However, Brent crude had already sustained weekly losses of about 17%, its largest weekly decline since the start of the COVID-19 pandemic and its biggest absolute drop since 1988.
Trump stated in a phone interview with CNN that the likelihood of new attacks on Iran was "extremely unlikely," depending on the nature of any potential agreement with Tehran. These remarks followed earlier threats of resuming military operations after the U.S. midterm elections, though no indicators of preparations for a large-scale military operation have yet emerged. Iran, in response, affirmed it would retaliate against any escalation by targeting U.S. and Israeli sites.
Tim Watters, a senior market analyst at KCM Trade, described Trump's statements as more moderate but noted that markets are still waiting to see if this reflects a sustained shift in his stance or a temporary change in rhetoric. Meanwhile, gold prices rose over 1% on Monday, benefiting from lower oil prices and receding inflationary fears, alongside a weaker dollar and anticipation of U.S. inflation data and Federal Reserve signals.
Spot gold increased by 1.6% to $4129.69 an ounce, and U.S. gold futures for December delivery rose by the same percentage to $4139. Lower oil prices reduce inflationary pressures, decreasing the likelihood of prolonged high interest rates and lowering the opportunity cost of holding non-yielding gold. The dollar's decline also supported gold by making it cheaper for holders of other currencies. However, U.S. monetary policy expectations remain a market pressure point, with October jobs data showing strong growth and a drop in unemployment to 4.1%, bolstering estimates of labor market resilience. The probability of a December U.S. interest rate hike rose to 79%, according to CME's FedWatch tool, up from 71% before the jobs data release. Other precious metals also saw gains, with silver up 2.8% to $53.31 an ounce, platinum up 1.6% to $1556.14, and palladium up 2.1% to $1044.28.
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