The prices of a number of raw materials - from silver and gold to oil and copper - fell on Thursday amid easing geopolitical tensions after a phone call between Chinese and US leaders - Xi Jinping and Donald Trump, as well as talks scheduled for tomorrow between Iranian and American representatives in Oman, Reuters reported, BTA reported.
The price of silver fell by almost 15 percent, while gold, crude oil and copper fell by about 2 percent. Investors reduced their positions in these assets due to the strengthening of the US currency, in which raw materials are quoted.
The current (spot) price of silver fell below $75 per troy ounce, then recovered slightly to $78 per troy ounce as of 08:50 Bulgarian time. Gold is trading at just over $4,900 an ounce, having earlier fallen to $4,800 an ounce.
“We have seen extreme volatility in precious metals and some other commodities this week, and today we are seeing some follow-on turmoil,“ said Tony Sycamore, an analyst at brokerage IG.
“The Iran-US talks appear to have returned to normal, which is removing some of the geopolitical premium from commodity markets, particularly oil,“ he added.
“Following the Trump-Xi call, tensions on the trade front have also eased. Investors are willing to sell gold at current levels.
Meanwhile, the U.S. dollar steadied in early Asian trading today ahead of interest rate decisions by the European Central Bank and the Bank of England.
The U.S. dollar index, which tracks the greenback against a basket of six major currencies, is near a two-week high. A stronger dollar makes raw materials more expensive for buyers holding different currencies.
Oil prices fell about 2 percent in Asian trading after the United States and Iran agreed to hold talks in Oman on Wednesday. This eased fears of a military conflict that could potentially disrupt supplies from the Middle East, Reuters reported.
Brent crude futures fell $1.44, or 2.07 percent, to $68.02. U.S. West Texas Intermediate crude fell $1.34, or 2.06 percent, to $63.80 a barrel.
Meanwhile, copper prices came under further pressure on demand concerns and rising inventories on the London Metal Exchange (LME).
Iron ore prices also fell 2 percent after data showed a significant build in inventories.
Soybean prices bucked the trend, climbing to a two-month high, boosted by comments from Donald Trump that China was considering sourcing the crop from the United States.