Crude oil rose about 1% to settle at $78.2 per barrel on Friday, but still recorded a more than 7% decline over the week. Prices remained highly sensitive to developments surrounding a potential Iran-Oman agreement to restore shipping through the Strait of Hormuz, which could return millions of barrels of Middle Eastern oil to global markets. However, uncertainty persisted, with Abu Dhabi National Oil Co. reporting attacks on three vessels transiting Hormuz and Iran reportedly targeting vessels it considers hostile. President Donald Trump maintained that negotiations were progressing, but differences remain over conditions for reopening the waterway. Meanwhile, Iran-backed Houthis claimed a large-scale attack against Saudi-aligned forces in Yemen. Oil reversed some gains in post-settlement trading after reports that the US could lift its naval blockade once commercial shipping through the strait resumes without restrictions.
Gold prices rose to above $4,350 per ounce on Friday, the highest in two months as lower energy prices and softening labor conditions limited expectations that the Federal Reserve would deliver a rate hike this year. Treasury yields consequently eased, lifting bullion prices as markets faced lower opportunity costs to hold assets that bear no interest. Elsewhere, data from clearing institutions indicated that institutional investors in China continued to increase long position on gold-backed assets for safety from volatility in tech stocks and recent signs of strength in the physical market, recently underpinned by central banks.
