MARKET UPDATE
Oil drops to 3-week low.
Oil prices slumped nearly 5% in Asian trade on Monday, falling to their lowest levels in three weeks after U.S. President Donald Trump said negotiations with Iran would resume later in the day after he called off a planned attack on the country.
As of 20:46 ET (00:46 GMT), Brent Oil Futures expiring in October fell 4.8% to $83.68 per barrel, while West Texas Intermediate (WTI) crude futures declined 4.9% to $80.50 per barrel.
Both contracts slipped more than 5% last week, but marked a monthly jump of more than 20% in July.
President Trump on Sunday said he had called off a massive planned U.S. military strike on Iran after Tehran and several Middle Eastern countries requested time for negotiations.
He said talks would begin on Monday and that discussions were aimed at reopening the Strait of Hormuz and ensuring Iran abandons its nuclear ambitions.
Oil prices had risen briefly last week as the conflict spread beyond the Gulf, stoking fears of wider disruptions to regional energy infrastructure and shipping.
Asia FX steady ahead of fresh Iran talks.
Most Asian currencies were little changed on Monday as investors awaited a fresh round of U.S.-Iran negotiations later in the day, while the Japanese yen extended gains on expectations that Tokyo and Washington could intervene again to support the currency after last week’s coordinated action.
The U.S. Dollar Index edged 0.2% lower in Asian trade by 01:13 ET (05:43 GMT). Dollar Index Futures also traded 0.2% lower.
Traders cautiously await fresh U.S.-Iran negotiations
Investor focus was on the latest round of U.S.-Iran talks after U.S. President Donald Trump said negotiations would resume on Monday but declined to set a deadline for reaching a deal.
The talks are expected to focus on Iran’s nuclear programme and measures to ensure safe navigation through the Strait of Hormuz after weeks of conflict disrupted oil shipments.
Gold rises.
Gold prices extended gains on Monday, with a softer U.S. dollar lending support to bullion after oil prices slumped on easing Middle East tensions.
Investors, however, remained cautious ahead of a packed week of U.S. economic data that could shape the Federal Reserve’s policy outlook.
At 01:43 ET (05:43 GMT), XAU/USD rose 0.5% to $4,062.41 an ounce, while Gold Futures gained 0.3% to $4,117.35. XAG/USD advanced 0.6% to $57.98 an ounce, while XPT/USD climbed 0.3% to $1,650.18.
Trump’s Iran delay sends oil lower, supports bullion
Gold found support after Trump said Iran and other Middle Eastern countries had requested more time to finalize an agreement that would reopen the Strait of Hormuz and eliminate Tehran’s nuclear threat, prompting markets to dial back expectations of an imminent escalation in the region.
The comments sent oil prices tumbling more than $5 a barrel at the start of Asian trading, easing fears that prolonged supply disruptions would keep inflation elevated and strengthen the case for tighter monetary policy.
The US Dollar Index also remained under pressure, slipping further below the 100 mark to around 99.7, making dollar-denominated bullion more attractive for overseas buyers and providing an additional tailwind for gold.
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