Oil Retreats on Dollar Strength and Gaza Ceasefire Hopes

Oil prices fell on Friday amid hopes for an imminent ceasefire agreement in Gaza that could ease geopolitical tensions in the Middle East, while a stronger dollar and lower gasoline demand in the United States also put pressure on prices.

Oil futures are on track to end the week flat or slightly lower after rising more than 3% last week. US Secretary of State Antony Blinken said on Thursday he believed talks in Qatar could lead to a ceasefire agreement in Gaza. Blinken met with Arab foreign ministers and Egyptian President Abdel Fattah el-Sisi in Cairo, while negotiators in Qatar are focusing on a six-week truce.

In the United States, the world’s largest oil consumer, gasoline product supplies, a proxy for demand, fell to below nine million barrels for the first time in three weeks, signaling a potential slowdown in crude oil demand.

Meanwhile, the dollar, which moves inversely with oil prices, rose after a surprise rate cut by the Swiss National Bank boosted risk appetite. A stronger dollar makes crude oil more expensive for buyers around the world.

Gold Prices Slip from Record High. Will it Continue to Fall Towards Support?

Global gold prices fell during today’s trading on Friday due to a stronger dollar, although it is on track for a fourth weekly gain in five weeks, as the US Federal Reserve’s decision to maintain its expectations for rate cuts in 2024 boosted the appeal of the yellow metal.

The dollar index rose to its highest level in three weeks against its rivals and is on track for its second weekly rise, making dollar-priced gold more expensive for holders of other currencies and thus reducing demand.

Gold and Dollar Now

Gold futures are now down 0.74% to $2168 an ounce. While spot gold is down about 0.66% to $2167 an ounce. The metal is up about 0.7% since the beginning of the week. On the other hand, the dollar index is up about 0.31% to 103.990 points.

Other Metals

Silver fell 1% in spot trading to $24.52 an ounce, platinum fell 0.8% to $900.85 and palladium fell 1.8% to $992.11.

The Fed Drives Wall Street to New Highs and Important Data Knocks Down Gold and Lifts the Dollar

Major stock market indexes on Wall Street rose to record highs during trading on Thursday, as chip stocks rose after upbeat forecasts from Micron Technology, while investors were relieved by the Federal Reserve’s commitment to its vision of cutting rates three times this year.

Meanwhile, global gold prices turned lower after the release of US manufacturing and services PMI and existing home sales data, which came as the dollar rose sharply. The initial reading of the manufacturing PMI for March came in at 52.5 points, while expectations were for 51.8 points, and the previous reading was 52.2 points.

The services PMI was 51.7 points in the initial reading for March, while expectations were 52 points, and the previous reading was 52.3 points. As soon as the data was released, gold prices sharply reduced their gains, while the dollar index extended its gains.

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Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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