Precious Metals Review

“Oil prices dipped slightly on Friday after Oman announced that operations at Mina al Fahal port were back to normal following reports that oil loadings had been halted after an explosion.

According to Reuters, citing people familiar with the matter, the explosion occurred between single-buoy mooring 1 and 2 berths because of an alleged drone attack. It was not clear when the strike took place, Reuters said, adding that LSEG data showed several supertankers anchored off the port.

Brent crude futures for August, the global oil benchmark, fell by 1.3% to $94.05 a barrel by 09:32 ET (13:32 GMT), while U.S. West Texas Intermediate crude futures declined 1.6% to $91.53 a barrel.

But the contracts remained on track for their first weekly gain in three weeks, driven by ongoing Middle East tensions which have left the prospect of an imminent U.S.-Iran peace deal mired in uncertainty.

Expectations have swirled around the potential for an agreement that would reopen the Strait of Hormuz, a vital waterway for a fifth of the world’s oil supply which has been effectively closed to tanker traffic since the start of the Iran conflict in late February.

The Iran-backed Hezbollah militia rejected a proposed ceasefire with Israel on Thursday and said it will not withdraw troops from the country, while also denouncing Lebanon-Israel negotiations. 

Israel kept up its air strikes in southern Lebanon, drawing retaliatory attacks from Hezbollah. Israeli officials signaled that its forces would not be withdrawing from southern Lebanon or halting operations in the country.

The development further undermined hopes for a U.S.-Iran peace deal, given that Tehran has repeatedly signaled that a Lebanon ceasefire is paramount for any lasting peace agreement.

Reports earlier this week showed Iran had halted indirect negotiations with the U.S., after Tehran accused Washington of violating their ceasefire with recent attacks. The U.S. struck several targets in Iran this week, drawing retaliatory attacks by the Islamic Revolutionary Guard Corps against targets in Kuwait and Beirut. 

The strikes came even as U.S. officials asserted that a peace deal with Iran was close and that talks were ongoing.”

“Gold fell more than 2% on Friday after a stronger-than-expected U.S. jobs report reinforced ‌ expectations that the Federal Reserve will keep interest rates higher for longer amid inflation concerns fuelled by the war in the Middle East.

Spot gold was down 2.4% at $4,365.93 per ounce at 10:15 a.m. EDT (1415 GMT), having ​fallen about 3.8% this week so far. Bullion fell to its lowest level since ​March 26 earlier in the session. 

U.S. gold futures for August delivery fell ⁠2.5% to $4,390.70.

Nonfarm payrolls increased by 172,000 jobs in May after rising by an upwardly revised ​179,000 in April, the U.S. Labor Department’s Bureau of Labor Statistics said in its report. A ​Reuters poll had forecast a gain of 85,000 jobs after a previously reported rise of 115,000 in April.

“We’ve got payrolls that came in fairly significantly over what was expected,” said Bart Melek, global head of commodity strategy ​at TD Securities.

“In light of the fact that we continue to have the war in ​Iran and very large energy prices and inflationary pressures, it makes it quite unlikely that the Fed is ‌in any ⁠mood whatsoever to lower rates. The implication for gold here is that the cost of carry is getting quite high.”

U.S. Treasury yields jumped after the release of the jobs data, increasing the opportunity cost of holding non-yielding bullion.

The price of Brent crude oil was on track for a ​weekly gain. Bullion has ​fallen more than 17% since ⁠the U.S.-backed war with Iran began in late February. The conflict has led to a surge in oil prices and stoked fears of inflation and ​higher interest rates.

Although gold is seen as an inflation hedge, higher rates tend ​to weigh ⁠on the metal. Markets are currently pricing about a 68% chance of a Fed rate hike in December, according to CME Group’s FedWatch tool, compared to about 50% before the jobs data. 

Gold demand was ⁠subdued ​in India this week, while premiums in China eased.

Spot silver ​fell 6.1% to $69.34 per ounce, platinum dropped 3.2% to $1,839.40, and palladium slid 1.9% to 1,295.75. All three metals were headed ​for a weekly loss.”