Commodity wrap: Crude oil surges 10% over the week amid escalating tensions in West Asia; gold rises 2%

While the precious metals, gold and silver, both closed in the positive territory over the past five days, they experienced profit booking mid-week.

Crude oil

In the international market, Brent Crude oil futures (for September delivery) rallied as much as 9.85% during the week, as the escalating tensions in West Asia reignited concerns over global energy security.

On Thursday, July 23, Brent crude oil futures surged to a two-month high of $102 per barrel (bbl), amid continued U.S. attacks on strategic Iranian targets.

Brent crude oil prices have surged about 33% so far this month, according to data on tradingview.com.

Recent attacks on Saudi oil tankers in the Red Sea, combined with rising tensions involving Iran and continued military actions by the United States, have heightened uncertainty in global energy markets.

Following recent attacks on two Saudi Arabia-linked oil tankers in the Red Sea by the Iran-backed militant group, the Houthis, Saudi Arabia retaliated by striking Yemen’s Houthi-held city of Hodeidah, as per media reports.

Furthermore, since last week, the United States has carried out strategic attacks against Iranian targets for 13 consecutive nights, with its latest wave concluding on Thursday, July 23.

Domestically, on the Multi-Commodity Exchange (MCX), crude oil contracts for August expiry soared 30% over the month and 9% during the week.

Gold

Globally, over the past five days, the COMEX gold contract (August expiry) has advanced 1.29%.

On the MCX too, old futures for expiry in August closed in the positive territory, rising nearly 2%. The contract traded negatively on Monday and Thursday, while closing in the green during the other weekdays.

On July 23, gold futures declined 2%, as global crude oil prices surged to a two-month high, amid concerns that persistent inflation could delay monetary policy easing by major central banks.

According to the CME Group’s Fed Watch, investors bet on a 65.8% probability that the US Federal Reserve will hold policy rates unchanged at its upcoming meeting scheduled for July 28 to 29.

Silver

In the international market, over the past five days, the COMEX silver contract, for delivery in August, surged 5%.

Domestically, on the MCX, silver futures for expiry in September closed in the positive territory, jumping 3% over the week. The contract has fallen 3% so far in the month of July.