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Global markets have seen significant fluctuations in recent weeks, particularly in the commodities sector, as oil and gold prices react to geopolitical tensions, economic policies, and supply chain shifts.
Oil Prices Climb for a Second Straight Week
Oil prices have continued their upward trend, with Brent crude rising 0.3% to $72.21 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 0.4% to $68.32 per barrel. Both benchmarks are on track for a 2% weekly increase, marking their largest gain since early 2025.
Key Drivers Behind Oil’s Rally:
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U.S. Sanctions on China-Iran Oil Trade: The U.S. Treasury Department imposed new sanctions on Chinese companies involved in Iranian oil purchases, aiming to cut Iran’s exports by 1 million barrels per day.
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OPEC+ Supply Adjustments: The Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced that seven member nations will reduce output by 189,000 to 435,000 barrels per day until June 2026, in an effort to curb overproduction and stabilize prices.
Gold Prices Maintain Strong Performance
Gold has surged for the third consecutive week, with prices reaching an all-time high of $3,057.21 per ounce on Thursday before slightly retreating 0.5% to $3,029.86 per ounce on Friday. Despite this dip, gold remains up 1.5% for the week.
Why is Gold Gaining Momentum?
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Federal Reserve’s Rate Cut Signals: The Fed has maintained interest rates at 4.25%-4.50% and projects two rate cuts by the end of the year, boosting demand for non-yielding assets like gold.
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Geopolitical Tensions: Escalating conflict in the Middle East, including Israeli airstrikes in Gaza, has strengthened gold’s appeal as a safe-haven asset.
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Economic Uncertainty: Concerns over global trade tensions, tariffs, and economic slowdowns are driving investors toward gold as a hedge against volatility.
Impact on UAE Markets
In the United Arab Emirates (UAE), these global trends have influenced local markets, with 24-carat gold prices dipping by AED 0.5 to AED 365.
With oil supply cuts and geopolitical risks persisting, analysts expect continued volatility in both energy and precious metals markets in the coming months.
