Over the past few weeks, international markets have seen considerable volatility, especially within the commodities sector, where oil and gold prices have shown substantial shifts.
Oil Market Dynamics
Oil prices have gone up for two weeks running, driven by political events around the globe and key choices made by leading oil producers. The price of Brent crude futures rose by 0.3%, reaching $72.21 a barrel, whereas U.S. West Texas Intermediate (WTI) crude futures went up by 0.4% to hit $68.32 a barrel. Each benchmark is set to see about a 2% increase over the week, which would be their biggest jump since early this year.
One major reason behind this increase is the recently imposed sanctions by the United States on Chinese entities engaged in purchasing Iranian crude oil. These actions taken by the U.S. Treasury Department form part of an extensive plan to limit Iran’s oil exports with the objective of cutting them down by roughly one million barrels daily.
Moreover, OPEC+ has disclosed strategies where seven member countries will cut production by volumes spanning from 189,000 to 435,000 barrels daily up until June 2026. The aim of this move is to rectify past oversupply issues and sustain market stability.
Gold Market Trends
At the same time, gold prices have shown strong resilience, set to achieve a third successive weekly increase. Although they dropped slightly by 0.5%, settling at $3,029.86 an ounce on Friday after reaching a peak of $3,057.21 an ounce on Thursday, gold still managed to rise by around 1.5% throughout the week.
Multiple elements contribute to this increase in gold prices:
-
Monetary Policy Expectations The Federal Reserve has kept its key interest rate between 4.25% and 4.50%, expecting two reductions by year-end. This usually increases the attractiveness of non-income-generating assets such as gold.
-
Geopolitical Uncertainties Rising tensions in the Middle East, highlighted by Israeli airstrikes in Gaza, have strengthened gold’s position as a refuge asset during times of geopolitical unrest.
-
Economic Concerns Ongoing concerns over worldwide economic expansion, intensified by trade disputes and possible tariff implementations, have led investors to seek refuge in gold as protection against stock market fluctuations.
In the United Arab Emirates, these international tendencies have affected domestic markets, causing 24-carat gold prices to drop by AED 0.5 to reach AED 365.
0 Comments