Oil climbs on Iran tensions

24 June, 2019 12:00 AM printer

NEW YORK: Oil prices added to recent gains on Friday on fears any US military attack on Iran would disrupt flows of crude from the Middle East, while a gauge of global stock markets edged back from seven-week highs following a run-up spurred by optimism over monetary policy.

Gold prices rose to near six-year highs. The dollar fell to a three-month low against a basket of currencies, report agencies.

Central banks have dominated economic news this week, with the Federal Reserve signalling the potential for a US interest rate cut later this year and the European Central Bank hinting at stimulus measures.

MSCI’s gauge of stocks across the globe shed 0.10 per cent, after a day earlier reaching its highest since May 1.

US-China trade tensions were also in focus ahead of an expected meeting between the countries’ two leaders next week at a G20 meeting in Osaka, Japan.

US stocks were supported by news that US Vice President Mike Pence called off a planned China speech that had been initially cast as a sequel to a blistering broadside he delivered in October, a move aimed at averting increasing tensions with Beijing.Having an accommodative interest rate outlook is a positive for the markets, but now investors are looking for direction on trade” said Christopher O’Keefe, portfolio manager at Logan Capital Management in Ardmore, Pennsylvania.

“For the market to meaningfully move forward from here you have to have some positive outcome on trade.” On Wall Street, the Dow Jones Industrial Average fell 33.84 points, or 0.13 per cent, to 26,719.33, the S&P 500 lost 3.68 points, or 0.12 per cent, to 2,950.5 and the Nasdaq Composite dropped 19.63 points, or 0.24 per cent, to 8,031.71.

The pan-European STOXX 600 index lost 0.36 per cent.

Trump said he had aborted a military strike on Iran because such a response to Tehran’s downing of an unmanned US

surveillance drone would have caused a disproportionate loss of life.

Spot gold added 0.8 per cent to $1,399.05 an ounce, surpassing the $1,400 level during the session.

“There is a perfect mix of ingredients for gold’s rush to the top — a weak macroeconomic environment, low bond yields, soft dollar and rising geopolitical tensions,” said Howie Lee, an economist at OCBC Bank.