Crude oil prices climb back to $111/bbl amid fears of another strike on Iran; gold down 0.6%

Crude oil prices were back to trading around $111 per barrel (bbl) during the early market hours on Wednesday, May 20, after renewed fears of a fresh US military strike on Iran loomed over global market investors, despite an existing ceasefire deal between the two nations.

Even though crude oil prices temporarily dropped to around $109 per bbl on Tuesday’s market hours after US President Donald Trump called off his pre-planned attack on Iran, the heightened uncertainty kept the prices elevated amid an absence of any de-escalation efforts.

The Brent crude oil prices hit an intraday high of $111.79 per bbl during Tuesday’s trading hours, after opening at around $109 per bbl levels. Investing.com data showed that the global benchmark crude oil rates have risen 5% in the last five days, and over 22% in the past one month.

The US-based West Texas Intermediate (WTI) crude oil prices surged to their intraday high level of $104.83 per bbl on Tuesday, after opening around $102 per bbl.

Global market investors and commodity traders were focused on Trump’s deadline this week to Iran for a potential peace deal; otherwise, the US leader has said that the military forces are prepared for a large-scale attack on the Gulf country.

Oil prices today

At 7:36 am (IST), the Brent crude oil prices were trading 0.24% lower at $110.73 per bbl on Wednesday, compared with $110.98 per bbl at the previous commodity market close, according to Investing.com data.

The WTI crude oil futures price was trading 0.37% lower at $103.64 per bbl as of 7:36 am (IST), compared to $104.01 per bbl at the previous market close, as per the exchange data.

Trump’s strike deadline

Early Tuesday, US President Trump called off a military strike on Iran, postponing a fresh attack on the Gulf nation at the request of the West Asian countries, as negotiations reportedly underway for a potential peace deal.

According to a CNN report, Trump was one hour away from launching the offensive against Iran on Tuesday. He also acknowledged that any US attack on Iran has the potential for further escalation of the conflict, which is now at its 12th week since the beginning.

The report further mentioned that Trump said he is willing to wait until later this week to see the progress on the negotiations or any peace deal; if not, then he will launch combat operations in Iran.

“We may have to give them another big hit,” said Donald Trump, talking about Iran on Tuesday, cited in the news portal’s report.

Trump also reportedly told the media at White House that the United States can launch a strike at Iran by early next week if the negotiations fail.

Gold prices today

At 10:02 pm (ET), the New York Mercantile Exchange-based COMEX gold prices were trading 0.6% lower at $4,486.50 per ounce on Tuesday evening in the United States, compared to $4,511 at the previous market close, as per the official data.

The precious yellow metal has lost 4.6% in the last five trading sessions, while losing over 8% in the past one month. Gold prices have lost 10.5% in the last three months due to the US-Iran conflict in West Asia.

Due to the rising uncertainty in the market, the demand for the US dollar has been weighing down on the gold prices in the global market. Traders are likely to buy a lower quantity of gold at a higher US dollar rate, due to the inverse relation between the precious metal and the benchmark currency price.

The Bloomberg US dollar spot (DYX) index data showed that the greenback was trading 0.04% higher at 99.369 as of 10:04 pm (ET), compared to the previous currency market close.

Focus will also remain on any proposal from either of the nations at conflict, as the market expects the crude oil prices to trade based on the dynamic geopolitical developments in West Asia.