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Crude Oil Sinks, Gold Gains amid US-China Tensions over Hong Kong

May 29, 2020 at 8:07 by Vladimir Vyun

Prices for crude oil sank amid risk aversion prevailing on markets today, heading to the first weekly decline in five weeks. Still, crude was on track to the highest monthly gain in years. Metals demonstrated mixed performance, with gold and palladium rising, platinum falling, and silver, copper, and aluminum staying about flat.

The major theme of the newswires today was the upcoming press conference of US President Donald Trump. He is expected to announce sanctions against China. The Asian country passed draft legislation to enforce national security laws in the autonomous city of Hong Kong. The move seriously strained relations between China and the United States.

The resulting risk-negative environment on markets increased demand for safer commodities, like gold, and hurt the appeal of growth-related ones, like crude oil. Going forward, markets will react to economic data from the United States as well as to the statement of the US President. Crude oil will also be likely affected by the oil rigs count released by Baker Hughes during the American trading hours.

Futures for delivery of WTI crude oil in July dropped by $0.69 (2.05%) to $33.02 per barrel as of 8:01 GMT on NYMEX today. Brent crude fell by $0.47 (1.33%) to $34.82 per barrel on ICE. Gold for delivery in August advanced by $3.9 (0.23%) to $1,732.2 per troy ounce on COMEX. July silver was almost unchanged at $17.96 per ounce. Spot price for platinum dropped by $3.03 (0.36%) to $835.89 per ounce, and palladium gained by $8.65 (0.45%) to $1,945.37 per ounce. July contract for copper was barely changed at $2.412 per pound on COMEX. Contract for delivery of aluminum in three months was was flat at $1,537 per metric ton on LME as of 7.01 GMT.

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