Commodities Wrap: Oil Sinks on Geopolitical Optimism, Gold Defies Dollar Strength
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| 2026-02-04 12:05Abstract：Crude oil prices extend losses as a potential diplomatic thaw between the US and Iran reduces supply risk premiums, compounded by headwinds from a firmer US Dollar. Meanwhile, Gold stages a technical recovery, returning to late-January levels despite the greenback's ascent.
Crude oil prices extended their decline as markets react to potential de-escalation between the US and Iran, coupled with a strengthening US Dollar.
Geopolitics and Currency Weigh on Crude
The prospect of a diplomatic thaw between Washington and Tehran has prompted traders to price out risk premiums. A firmer dollar makes oil more expensive, leaving WTI and Brent searching for support.
Gold Stages Technical Recovery
- Gold (XAU/USD) reclaimed ground despite broad USD strength.
- Prices rebounded to levels seen in January as technical buyers intervened.
- Divergence highlights shifting geopolitical risks in the Middle East vs macro correlations.
Technicals
- Asset: WTI and Brent
- Asset: XAU/USD
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