Oil Rebounds on Middle East Tensions, Gold Extends Decline
Commodity markets were mixed on September 28, as oil prices rebounded over 1% due to renewed Middle East tensions. US President Donald Trump rejected a peace deal from Iran to resolve their conflict and reopen the Strait of Hormuz, keeping energy costs elevated.
Brent crude futures rose $1.32, or 1.27%, to $105.64 a barrel, while US West Texas Intermediate crude was at $93.11 a barrel, up 70 cents, or 0.76%. This rebound in oil prices put pressure on the Federal Reserve to raise interest rates further to combat sticky inflation.
Gold prices dropped as an impasse over the Strait of Hormuz maintained elevated energy costs and interest rate pressures. Bullion was trading around $4,265 an ounce, after ending the previous week down more than 2%. Other precious metals, including silver, platinum, and palladium, also declined in value.
The dollar traded in a tight range against most Group-of-10 peers as hopes of a deal to reopen the Strait of Hormuz lingered. Traders were also eyeing the Federal Reserve's preferred gauge of inflation and jobs data this week.