Activity in the Oil Market
For the second week in a row, oil prices have risen, driven by geopolitical events and decisions from major oil producers. Brent crude futures gained 0.3% to reach $72.21 per barrel, and U.S. West Texas Intermediate (WTI) crude rose by 0.4% to $68.32 per barrel. Both indexes are heading towards a 2% gain this week, the biggest since early 2025.
A key factor in this increase is the United States introducing sanctions against Chinese entities buying Iranian oil. The U.S. Treasury Department aims to decrease Iran’s oil exports by around 1 million barrels a day with these sanctions.
In addition, OPEC+ has decided that seven member countries will decrease their oil production by amounts between 189,000 and 435,000 barrels per day until June 2026. This move is intended to rectify previous excess production and keep the market stable.
Current Gold Market Developments
At the same time, gold is on track for a third consecutive week of gains, despite a slight dip of 0.5% to $3,029.86 per ounce on Friday, following an all-time high of $3,057.21 on Thursday. Gold is up by around 1.5% for the week.
A few reasons are driving this rise in gold prices:
- Changes in Monetary Policy: With the Federal Reserve keeping its interest rate between 4.25% and 4.50% and expecting two rate cuts by year-end, non-yielding assets like gold become more attractive.
- Growing Geopolitical Risks: Rising tensions in the Middle East, such as the Israeli strikes in Gaza, highlight gold’s role as a safe-haven asset during geopolitical unrest.
- Worries About the Economy: Concerns about global economic growth continue due to trade tensions and potential tariffs, leading investors to view gold as a safeguard against market instability.
In the United Arab Emirates, these global trends are affecting local markets, with the price of 24-carat gold decreasing by AED 0.5 to AED 365.
