Middle East Tensions Fuel Oil Price Surge Amid Gold Price Drop

The price of crude oil surged by its largest margin in three weeks due to escalating tensions in the Middle East. The conflict between the US and Iran has raised concerns about supply disruptions, causing WTI crude prices to rise by 2.8% and settle near $86 per barrel.

Traders are wary of chasing higher prices as long as shipment volumes continue to flow through the Strait of Hormuz, which remains a key chokepoint for global oil supplies. According to Ole Hansen, Head of Commodity Strategy at Saxo Bank, 'it comes down to shipment volumes' and the impact they have on market sentiment.

Meanwhile, gold prices edged lower due to renewed geopolitical tensions in the Middle East, which have heightened concerns about inflationary pressures and potential interest rate hikes by the Federal Reserve. Despite this, gold has risen approximately 10% in August, putting it on track for its largest monthly gain since January.