(RTTNews) – Adding to yesterday’s surge, gold prices have edged higher on Thursday as crude oil prices ease following reports of Saudi Arabia expediting repair work on its damaged East-West pipeline.
In addition, a message by U.S. President Donald Trump on the Iran war lowered Middle East tensions and oil-linked inflationary pressure.
Front Month Comex Gold for October delivery has moved higher by $12.70 (or 0.29%) to $4,366.00 per troy ounce.
Front Month Comex Silver for October delivery has soared by $1.442 (or 2.24%) to $65.835 per troy ounce.
On Wednesday, citing people familiar with the matter, Reuters reported that Saudi Arabia has started to offer substantial loadings of crude oil to Asian refiners via ship-to-ship (STS) transfer off Oman’s Sohar port.
In addition, Bloomberg reported that Saudi oil major, Aramco is vigorously carrying out repairs with a target to restore full production in around six weeks.
Bloomberg also reported that Saudi Arabia sold nearly 20 million barrels of crude oil in the spot market so far this week.
Claiming that the resumption of operations from Saudi Arabia could happen within days, U.S. Energy Secretary Chris Wright remarked that Saudi Arabia is trying to transport its output through the Strait of Hormuz with military assistance from the U.S.
After these reports signaled that the key pipeline for Saudi Arabia through which the nation transported its output by bypassing the Strait of Hormuz will be partially restored soon, concerns of crude oil supply disruptions in the Middle East eased.
Iran-backed Houthi militants of Yemen were behind the drone attacks that damaged the pipeline in the Medina and Riyadh regions last week, forcing Saudi Arabia to shut its operations.
WTI crude oil for October delivery was last seen trading at $102.13, down by $0.30 (or 0.29%).
After easing supply disruption concerns led to a slide in crude oil prices today, the U.S. Dollar Index today traded nearly flat. With a rate-hike already factored in, gold prices gained.
Yesterday, at the conclusion of its two-day meeting of the Federal Open Market Committee, in line with market forecasts, the U.S. Federal Reserve hiked its target interest rate range by 25 basis point, bringing it to 3.75% to 4.00%. Of particular note, the decision was unanimous, with a 12-0 vote.
Persisting energy price growth and the recent inflation data that came in stronger-than-expected compelled the Fed to increase the rate. Notably, this is the first rate-hike in three years.
Yesterday, the U.S. dollar reached a seven-week high following the interest rate announcement.
Today, the U.S. Dollar Index was last seen trading at 100.24, down by 0.02 (or 0.02%).
Experts highlight that despite moving lower, oil prices are trading around 20% higher than last month, suggesting hidden inflationary pressures in the economy, which could prompt Fed officials to execute another rate hike before year-end.
With the prevailing geopolitical risks associated with the U.S.-Iran conflict and the recent Saudi Arabia-Houthi military escalation, traders have not discounted the safe-haven demand for gold.
Meanwhile, Trump stated that the U.S. is hopefully towards the end of its war with Iran. Trump repeated his claim that Iran wants to make a deal with the U.S. and stressed that the U.S. heard it from Iran directly. Iran is yet to officially comment on Trump’s claims.
Citing three sources, Axios reported that Trump is expected to meet the leaders and foreign ministers of the Gulf Cooperation Council’s member-nations in New York next Tuesday to discuss the next steps in the war with Iran.
On the economic front, data from the U.S. Labor Department showed that for the second week of September, the number of people claiming unemployment benefits fell by 10,000 to 196,000.
Continuing jobless claims decreased to 1,730,000 for the week ending September 5 from 1,769,000 of the previous week.
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