Commodities Dive as Global Tensions Ease
Prices of commodities including silver, gold, oil, and copper dropped as US-China tensions eased following a leaders' call. Talks between the US and Iran further reduced geopolitical uncertainties. A strong US dollar also made commodities pricier for non-dollar holders, leading to the sell-off.
On Thursday, global commodity prices, including silver, gold, crude oil, and copper, experienced a significant decline as geopolitical tensions eased. This shift followed a critical telephone conversation between the leaders of China and the United States and upcoming talks between the US and Iran.
Silver saw a near 15% plunge, with other commodities also dipping around 2% due to investors adjusting positions in response to a strengthening US dollar, the currency in which commodities are priced. According to Tony Sycamore, an analyst at IG, recent volatility in precious metals and commodities reflects market aftershocks.
The easing of trade tensions after a conversation between US President Trump and Chinese President Xi Jinping contributed to the sell-off, as did ongoing talks with Iran. Combined with decisions from the European Central Bank and the Bank of England to maintain interest rates, these factors steadied the dollar.
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