Oil declines and gold rises after the progress of the US-Iran talks economy

Oil prices fell today, Monday, after the end of the first round of talks between America and Iran in Switzerland, with Tehran announcing that it had obtained exemptions for oil and petrochemical exports, which eased fears of a shortage of supplies in global markets, while gold rose and the dollar consolidated amid anticipation of the path of a final agreement within 60 days.

At the time of writing the report, Brent crude fell to about $78.84 per barrel, and West Texas Intermediate crude fell to about $75.11 per barrel, after a volatile session in which prices rose at the beginning with US President Donald Trump’s threats to resume attacks on Iran and Tehran’s statements regarding closing the Strait of Hormuz.

Officials from America and Iran said that they had concluded the first round of talks in Switzerland, after they began yesterday, Sunday, according to the terms of a memorandum of understanding reached last week to extend the fragile ceasefire that began in April for at least an additional 60 days.

Iranian Foreign Minister Abbas Araqchi indicated that his country had obtained exemptions for oil and petrochemical exports, the release of some frozen assets, and the launch of a plan for reconstruction and development in Iran.

Reuters quoted IG market analyst Tony Sycamore as saying that achieving tangible results on the ground regarding the high-level talks between America and Iran is still unresolved, especially in southern Lebanon, where Israel and Hezbollah appear determined to continue the conflict.

ING analysts said in a note reported by Reuters that recent developments show that the path towards a more sustainable agreement will be difficult, with very real risks of hostilities remaining during the 60-day ceasefire period.

Oil prices fell by more than 8% last week, driven by hopes of increasing supply through the release of stranded shipments in the Gulf and the possibility of lifting US sanctions on Iranian oil as part of the agreement between Washington and Tehran.

Gold and dollar

In precious metals:

• At the time of writing, gold had risen to about $4,195.20 per ounce.
• Silver increased to $66.43 per ounce.
• Platinum moved near $1,667.30 an ounce.
• Palladium moved near $1,277 an ounce.

Reuters quoted Edward Meir, an analyst at Marex, as saying that the situation in Switzerland has changed from what it was hours ago when the two parties were arguing, but he added that the markets will continue to trade according to geopolitical trends for a little longer due to the speed of the change in the situation.

In currency markets, the dollar consolidated with:

• It rose against the yen to about 161.69 yen.
• The euro fell to $1.14547.
• The British pound fell to $1.32085.
• The Australian dollar moved near $0.70045.
• The New Zealand dollar moved near $0.57278.

US Treasury bonds remained under pressure, as the yield on two-year bonds rose to about 4.23%, with traders increasing their bets on raising interest rates this year after hawkish signals from the Federal Reserve.