Brent crude tumbles to $83 a barrel on diplomacy hopes
Gold prices edged higher in European trading Monday after President Trump refrained from launching fresh attacks on Iran, easing concerns about inflation and further interest-rate hikes and sending oil lower.
In early European trading, New York gold futures rose 0.2% to $4,113.90 a troy ounce. Brent crude, the global oil benchmark, tumbled to $83 a barrel after Trump told reporters Sunday that the U.S. would engage in talks with Iran beginning Monday afternoon.
The dollar’s slide also supported gold. The U.S. dollar index was down 0.1% to 99.79 after Japan and the U.S. confirmed joint intervention to shore up the yen, making dollar-denominated commodities cheaper for overseas buyers.
In early Asian trade, spot gold rose 0.4% to $4,058.79 a troy ounce. Linh Tran, a market analyst at XS.com, said the direction of the U.S. dollar, U.S. Treasury yields and incoming U.S. labor market data will affect gold’s trends over the next few sessions more than the traditional safe-haven narrative.
Tran said geopolitical risks no longer mean that gold prices will have a one-direction reaction, since Middle East tensions can drive oil prices and inflation expectations higher as much as they can strengthen safe-haven demand. The analyst said gold is currently in a transitional phase and that recent gains look more like a technical rebound.