A sharp decline in gold prices against the background of the trade truce between America and China and high oil prices with OPEC decision to extend production cut.
According to Reuters, Gold futures fell sharply on Monday evening in the US market as the dollar gained against other major currencies and concerns over the US-China trade dispute fell following the two countries’ agreement to resume trade negotiations.
China and the United States have decided to resume trade negotiations following a meeting between US President Donald Trump and his Chinese counterpart Xi Jinping on the sidelines of the Group of 20 (G20) meeting in Japan on Saturday.
Stock prices rose in global markets as investors are willing to invest in high-risk instruments, while the greenback against other major currencies, leading to a fall in the price of gold.
The dollar index rose to 96.87 points by 0.75%.
On Monday, the price of gold fell $24.40, or 1.7 percent, to $1,390.33 an ounce in August, the biggest daily drop in a year.
Gold rose on Friday by $1.70, or 0.1 percent, to $1413.70 an ounce, the highest price in six years.
The price of gold rose by more than 7.7% in last June, the best monthly performance of gold for nearly three years, and gold achieved gains during the week ending on Friday by 1%.
For next September delivery, Silver fell $0.148 to $15,193 an ounce, while copper fell $0,055 to $68,880 per pound.
On the other hand, oil prices rose with OPEC decision to extend production cut, as US oil futures closed yesterday, Monday, with a significant gain.
The price rise came on the back of a decision by the Organization of the Petroleum Exporting Countries (OPEC) to extend production cuts by 1.2 million bpd for another nine months.
It is expected to agree on the decision to extend the final term during the meeting of OPEC countries with its allies from the oil countries from outside the Organization in the so-called «OPEC+» tomorrow.
West Texas Intermediate crude (WTI) rose $0.62, or 1.1 percent, to $59.09 a barrel for next August, after rising $60.28 a barrel at the start of the session.
WTI rose by 1.8% last week, while it rose by more than 9% in June as a whole.
The oil ministers of OPEC agreed during their meeting in the Austrian capital, Vienna on Monday to continue work on the decision to reduce oil production by 1.2 million bpd until the end of the first quarter of next year.
This decision requires the approval of the non-OPEC oil countries during the meeting of the so-called OPEC+ tomorrow to become effective, while most of these oil-allied countries, especially Russia, approved the decision.
The OPEC+ countries agreed at the end of last year to cut production by 1.2 million barrels from the beginning of this year and for a period of six months ended yesterday, aimed at reducing the surplus supply in the global oil market and promote prices, which had sharply declined early last year.
A Bloomberg report said that while the decision to reduce production led to an increase priced, it also led to a decline in the share of OPEC countries from the global oil market to the lowest levels since 1991.