Oil Falls 7.5% as Gold Rebounds in Pakistan
Oil falls 7.5% on Monday as talks between Iranian and Qatari officials lifted hopes for an end to the US-Israel war with Iran and for steadier Middle East crude supply. Brent crude futures fell $8.47, or 7.47 per cent, to $104.96 a barrel by 1724 GMT, according to Reuters.
United States West Texas Intermediate (WTI) crude fell $7.50, or 7.2 per cent, to $96.62. The session low for Brent was $104.49, and for WTI it was $96.44. Analysts linked the drop to hopes of a diplomatic breakthrough after three consecutive days of talks.
Oil falls 7.5% on peace talks
Iran’s president said the country’s supreme leader had granted the government “certain authorities” regarding peace talks. Iranian negotiators held days of talks with Qatari mediators aimed at ending the war. A draft proposal is being circulated, with a follow-up meeting possible, an official briefed on the talks said.
Pavel Molchanov, an analyst at Raymond James, said signs of progress in the talks pushed oil prices lower. He added, however, that scepticism was warranted after many “false dawns” over the past several months.
That caution matters: the fall reflects what traders expect, not a signed deal.
A day of two sessions for oil
The close extends a fall that began earlier on Monday. In the morning session, Brent had already dropped to $108.96, down 3.94 per cent, as reported in our earlier oil prices report. By the close, the benchmark had shed another $4 to $104.96.
The arc of the day is clear. Each round of positive signals from the talks took more risk premium out of the price.
For Pakistan, the direction helps at the pump, though with a lag. The government has already cut fuel prices for 3 November, with petrol down Rs3.40 and diesel down Rs7.76. A sustained fall in crude would ease pressure further, while a reversal would push prices back up under the daily pricing system.
Gold rebounds in Pakistan
Gold prices in Pakistan rebounded on Monday, gaining Rs2,400 per tola to Rs412,136. The rise tracked a recovery in the international market, as easing oil prices helped temper inflation concerns.
In the international market, spot gold rose 2.1 per cent to $3,957.19 per ounce by 1411 GMT, recovering from a one-year low hit in the previous session. United States gold futures for December delivery advanced 1.77 per cent to $3,967.40.
According to rates released by the All-Pakistan Gems and Jewellers Sarafa Association, the price of 10 grams of gold increased Rs2,058 to Rs353,340. The rebound followed a sharp fall on Saturday, when gold had plunged Rs10,800 per tola to Rs409,736.
That Saturday fall was covered in our gold price report, which came after gold had already touched a one-year low. Monday’s recovery does not erase that drop, but it shows how quickly bullion moves when oil and rate expectations shift.
Rupee edges up as rate bets ease
The Pakistani rupee appreciated Rs0.03 against the US dollar to close at Rs276.72 in the inter-bank market, extending its marginal gains. The move is small, but it runs in the same direction as the oil fall: less pressure on imports, less pressure on inflation.
Peter Grant, vice president and senior metals strategist at Zaner Metals, noted that markets were still anticipating a United States Federal Reserve rate hike in December, although expectations had eased slightly. Traders were pricing in a 77 per cent probability of a rate hike, down from 80 per cent a week earlier, according to CME Group’s FedWatch Tool.
For Pakistani households, the combined picture is mixed but better than a week ago. Fuel is cheaper than it was, gold has steadied after a steep fall, and the rupee has held its ground. The next move depends on whether the Iran talks produce terms both sides can accept, or join the list of false dawns.
Why did oil prices fall on Monday?
Brent crude fell 7.47 per cent to $104.96 after three days of talks between Iranian and Qatari officials raised hopes of an end to the US-Israel war with Iran.
What happened to gold prices in Pakistan?
Gold gained Rs2,400 per tola to Rs412,136 on Monday, after plunging Rs10,800 per tola on Saturday to Rs409,736.
What is the international gold price?
Spot gold rose 2.1 per cent to $3,957.19 per ounce, recovering from a one-year low, while United States December futures rose 1.77 per cent to $3,967.40.
How did the rupee perform?
The rupee appreciated Rs0.03 against the US dollar to close at Rs276.72 in the inter-bank market.
Will the oil fall last?
That depends on the talks. Analysts warn that scepticism is warranted after many false dawns, and no deal has been signed yet.
