Live updates: Follow the latest news on the Iran war
Oil prices slipped back below $80 a barrel on Thursday on hopes that the Strait of Hormuz would reopen after Iran indicated progress in talks with Oman, easing concerns over supply disruptions.
Brent, the benchmark for two-thirds of the world's oil trading 0.45 per cent lower at $79.07 a barrel at 8.23am UAE time. West Texas Intermediate, the gauge that tracks US crude, was down 0.66 per cent to $74.72 a barrel.
Iranian Foreign Ministry spokesman Esmaeil Baghaei said on Wednesday that Iran and Oman are in the final stages of drafting an agreement on a proposed safe shipping route through the Strait of Hormuz after two months of negotiations.
Gold, meanwhile, climbed to a seven-week high as investors continue to seek the safety of the precious metal despite the Iran war-driven volatility in markets and on growing hopes over the strait reopening.
Spot gold was up 0.5 per cent at $4,265.22 per ounce on Thursday morning, after hitting its highest level since June 18. On Wednesday, bullion posted its biggest daily gain since February.
Spot gold has declined 19 per cent since the onset of the Iran war on February 28, due to fears of energy-driven inflation pushing interest rates higher.
“Gold has entered a completely different phase following the powerful turnaround seen in prices during the latest trading sessions near the $4,300 level. The current rally is no longer simply a technical rebound from lower levels. Instead, it is increasingly supported by a combination of fundamental factors that are now moving in the same direction: a gradual weakening in the US labour market, a decline in the US dollar, lower US Treasury yields, and a shift in expectations surrounding Federal Reserve monetary policy,” said Rania Gule, senior market analyst at XS.com for Mena region.
“There are now simultaneous signs that the US labour market is losing some of its momentum. I consider this development supportive for gold because it brings the possibility of a future shift in monetary policy toward a less restrictive stance back into focus.”
