Oil Prices Decline, Gold Rises as Hopes for US-Iran Ceasefire Mount

Global Commodity Markets Trade on a Mixed Note Amid Geopolitical Developments

Commodity markets experienced a mixed performance on May 29, as investors closely monitored geopolitical developments, currency movements, and changing global demand expectations. The trade was characterized by a delicate balance of factors influencing various markets.

Crude oil prices edged lower, despite hopes of a possible agreement to extend the U.S.-Iran ceasefire. The prospect of an extended ceasefire led to a decrease in tensions, which in turn reduced the demand for oil. However, comments from U.S. Vice President JD Vance stating that both nations were "close" to a deal but "not there yet" prevented a sharper decline in prices.

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Brent crude futures for July delivery fell 35 cents or 0.37% to $93.36 per barrel, while U.S. WTI crude futures declined 63 cents or 0.71% to $88.27 per barrel. The more actively traded August Brent contract also slipped 46 cents, or 0.50%, to $92.24 per barrel.

Meanwhile, gold prices inched higher as investors evaluated reports surrounding the U.S.-Iran ceasefire agreement alongside persistent concerns over inflation and the trajectory of U.S. interest rates. Spot gold rose 0.4% to $4,512.79 per ounce as of 0113 GMT and was marginally higher for the week. U.S. gold futures also gained 0.2% to $4,543.10 per ounce.

The U.S. dollar extended its weakness against major global currencies and was on track to end the week lower. Sentiment was influenced by reports that the U.S. and Iran had reached an understanding to extend the ceasefire in the Middle East and ease shipping restrictions through the Strait of Hormuz, reducing safe-haven demand for the dollar.