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GOLD & CRUDE OIL TALKING POINTS:

  • Crude oil prices[1] fall from 4-year high as Trump’s Iran decision looms
  • Gold prices[2] mark time with a speech from Fed Chair Powell in focus
  • API inventory flow report, EIA short-term energy outlook due ahead

Crude oil prices touched a four-year high amid worries that the US will abandon a nuclear disarmament deal with Iran, re-imposing sanctions that crimp global supply. A swift reversal followed however after President Trump said a decision on the matter will be revealed at 18:00 GMT today, four days ahead of a deadline on May 12.

The announcement may have spooked short-term buyers reluctant to hold onto skewed exposure as event risk suddenly looms on the horizon. The subsequent profit-taking brought the WTI contract nearly all the way back to where it started for the session. Meanwhile, gold prices marked time as all eyes turned to a much-anticipated speech from Fed Chair Jerome Powell at a joint SNB/IMF event in Zurich, Switzerland.

POWELL, TRUMP IN FOCUS FOR COMMODITY MARKETS

The central bank chief is due to opine on the impact of monetary policy on global financial conditions. That seems especially appropriate as the Fed’s own tightening efforts spill over into higher borrowing costs beyond US borders. Mr Powell seems likely to signal that such knock-on effects will not easily deter stimulus withdrawal, which may boost the US Dollar[3] the expense of commodities at large.

A stronger greenback bodes inherently ill for anti-fiat alternatives epitomized by gold. Crude oil may likewise suffer, although Mr Trump’s decision on Iran may overshadow other considerations in the near term. Weekly inventory

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currensceneFLOGO WHTsquareThough not the oldest form of currency, some form of shell money appears to have been found on almost every continent. The shell most widely used worldwide as currency was the shell of Cypraea moneta, the money cowry.

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