Oil and gold prices rose on Monday amid concerns that the Middle East conflict could escalate after rocket attacks on the occupied Golan Heights that Israel and the United States blamed on Lebanon’s Hezbollah.
Crude oil prices pared losses last week, with Brent crude futures up 20 cents, or 0.3%, at $81.33 a barrel by 0010 GMT. U.S. West Texas Intermediate (WTI) crude futures were up 9 cents, or 0.1%, at $77.25 a barrel.
Last week, Brent crude fell 1.8% on weaker Chinese demand and expectations of a ceasefire in Gaza, while WTI fell 3.7%.
“Concerns about rising tensions in the Middle East led to continued new buying, but continued concerns about weak demand from China limited the upside,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
Meanwhile, gold prices rose on Monday amid expectations of a September U.S. rate cut, rising geopolitical tensions in the Middle East and a shift in focus toward the Federal Reserve’s monetary policy meeting later this week.
Spot gold was up 0.5% at $2,397.65 an ounce by 00:25 GMT. U.S. gold futures were up 0.7% at $2,396.70.
The Federal Open Market Committee of the U.S. central bank is expected to hold interest rates at 5.25%-5.50% when it meets on July 30-31. However, the U.S. jobs data came in weakest on record in June, inflation slowed, and comments from senior Fed officials have caused futures markets to fully price in a 25bp cut in September.
On a geopolitical note, Israel’s security cabinet has given the government of Benjamin Netanyahu permission to decide “how and when” to respond to the missile attack on a town in the occupied Syrian Golan yesterday, Saturday, which killed 12 people. Israel and the United States have accused Lebanese Hezbollah of being responsible for the attack.
Hezbollah denied responsibility for the attack, which is the deadliest attack on territory controlled by Israel or Hezbollah since the devastating war that began in the Gaza Strip on October 7, 2023. Israel, meanwhile, has vowed to respond to Hezbollah, and Hezbollah aircraft bombed targets in southern Lebanon yesterday, Sunday.
Israel has been waging war in the Gaza Strip since October 7, 2023, with US support, resulting in the deaths or injuries of more than 130,000 Palestinians, mostly children and women, and the disappearance of more than 10,000 people due to massive destruction and extreme famine. This is one of the worst humanitarian disasters in the world.
