The price of oil (CLS10) experienced a significant decline at the start of trading on Monday (5/5/2022), approaching the lowest level seen in the past four years. Meanwhile, strong labor market data from the United States (US) released last Friday added pressure on gold prices.
Today, oil prices fell by $3.08 to $55.31 per barrel following the OPEC+ decision to increase production levels next month. Previously, on April 9, concerns over this matter caused oil to drop to $55.10 per barrel, marking the lowest price since February 2021.
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OPEC+, led by Saudi Arabia, officially announced a production increase of 411,000 barrels per day this past Saturday. This decision comes amid global economic uncertainty fueled by ongoing trade tensions.
As the economy appears to be weakening and demand decreases, the rising supply has put significant downward pressure on oil prices.
At the same time, gold prices faced a decline for two consecutive weeks last week and are struggling to recover this morning.
Gold is under pressure due to the easing of trade tensions that were intensified by U.S. President Donald Trump. The latest pressure came after last Friday’s report indicated that the non-farm payrolls (NFP) in the United States rose by 177,000 in April, exceeding the forecast of 140,000 from Trading Central.
This data reflects a robust labor market in the U.S., despite the prevailing economic uncertainties. Consequently, the possibility of the Federal Reserve cutting interest rates in the near future has diminished. The U.S. central bank is set to announce its monetary policy early Thursday morning, which may further impact gold prices negatively.
