Precious metals also drew support from easing geopolitical tensions after signs of renewed diplomatic engagement between the U.S. and Iran. Iran’s Foreign Ministry spokesperson said negotiations with the U.S. could be pursued based on national interests, raising hopes for a diplomatic breakthrough. The comments weighed on crude oil prices while providing additional support to gold prices. Going forward, developments in U.S.-Iran relations, movements in the U.S. dollar, and expectations for the Federal Reserve’s policy path will remain the key drivers of gold prices in the near term.
Crude oil edged lower in early Asian trading on Tuesday as hopes for renewed diplomatic engagement between the U.S. and Iran eased immediate concerns over supply disruptions in the Middle East. Reports indicated that mediators were working to broker a new ceasefire and bring both sides back to the negotiating table, improving market sentiment and reducing the geopolitical risk premium that had driven oil prices sharply higher in recent sessions.
However, losses remained limited as the situation in the Strait of Hormuz continued to support prices. Navigation through the vital shipping route remains severely restricted, keeping physical crude supplies tight and raising concerns over potential disruptions to global oil flows. As a result, while optimism over diplomacy has weighed on prices, ongoing logistical risks in the region continue to provide underlying support to the oil market.
Natural gas prices remained at the lower end of their recent trading range, pressured by concerns that a tropical depression in the Gulf of Mexico could strengthen into Tropical Storm Bertha and disrupt LNG export operations along the U.S. Gulf Coast. Any disruption to export facilities could temporarily reduce LNG shipments, leaving more natural gas available in the domestic market and increasing supply, which has weighed on prices.
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