Oil Rises on Trade Talk Hopes As Gold Gains amid Geopolitical Tensions
TEHRAN (Tasnim) – Oil prices edged higher on Thursday, rebounding after a sharp fall, as optimism over US-China trade negotiations lifted sentiment, while gold prices surged on geopolitical concerns between India and Pakistan.
Brent crude futures rose 10 cents, or 0.2%, to $61.22 a barrel.
US West Texas Intermediate (WTI) crude climbed 13 cents, or 0.2%, to $58.20 at 0632 GMT.
“Optimism around the US and China trade talks this weekend is a primary factor supporting the rebound in the oil market,” said independent analyst Tina Teng.
She noted that signs of a de-escalating trade war had improved sentiment, leading to a recovery in oil prices within an oversold market.
US Treasury Secretary Scott Bessent is set to meet China's top economic official in Switzerland on May 10.
The planned meeting marks a potential breakthrough in the prolonged trade war between the world's two largest economies, which has weighed on global growth and oil demand.
President Donald Trump said on Wednesday that China initiated the talks, but emphasized he would not cut tariffs just to bring Beijing to the table.
Bessent stated the talks were an initial step and not yet considered advanced negotiations.
Despite the rebound, oil price gains were limited by concerns over weak demand.
The Federal Reserve left interest rates unchanged but flagged rising economic uncertainties.
“The Fed signaled that rates will likely remain on hold until the effects of tariffs become clearer. This boosted the US dollar, which added to headwinds facing the broader commodity markets,” ING analysts wrote in a Thursday report.
A stronger dollar makes oil more expensive for non-US buyers, reducing demand.
Adding to the concerns, US gasoline inventories increased last week, suggesting tepid consumption ahead of the summer driving season.
Meanwhile, OPEC and its allies, known as OPEC+, are expected to raise oil output, further pressuring prices.
In precious metals, gold prices surged on May 8 as tensions escalated between India and Pakistan, reinforcing gold’s appeal as a safe-haven asset.
June gold contracts on the Multi Commodity Exchange of India (MCX) opened at Rs 97,323 per 10 grams.
“Gold regained some ground amid renewed caution surrounding the US-China trade negotiations, which reinforced its status as a safe-haven asset,” said Deveya Gaglani, Senior Research Analyst.
He noted MCX gold opened over 100 points higher and remains bullish, trading above its 9-day EMA.
Investors are awaiting US jobless claims data due later in the day.
