Oil prices fall, gold and silver fail to hold! Global commodities suffer a "Black Thursday"

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Source: China News Express

Progress has been made in the US-Iran negotiations, and oil tankers in the Strait of Hormuz are gradually resuming passage. This news has put an end to the previously tense international crude oil market.

On May 20 local time, US President Trump said he was willing to wait several more days for Iran's latest response regarding the negotiations. On the same day, Iranian Foreign Ministry spokesman Baghaei stated that Iran had received a new proposal from the United States and is currently studying it.

Meanwhile, the Iranian Revolutionary Guard Corps Navy announced that, in the past 24 hours, 26 vessels have safely transited the Strait of Hormuz under Iranian coordination.

　　

The market remains on alert. Citigroup has issued a warning, stating that the market may be underestimating the risks of a prolonged closure of the Strait of Hormuz. Brent crude could still rise to $120 per barrel in the short term.

The energy consultancy Wood Mackenzie pointed out that if the strait remains closed until the end of the year, oil prices could approach $200 per barrel. Conversely, if the US and Iran reach an agreement quickly and navigation resumes in June, Brent crude could fall to around $80 per barrel by year-end.

　　

stated in an interview with China News Express that the future trend of oil prices essentially depends on whether the US and Iran cease military actions and whether the Strait of Hormuz can reopen. However, the situation in the Middle East is complex and volatile, filled with games among various parties and uncertainties, making it difficult to accurately predict in the short term.

　　

believes that in the short term, international oil prices will fluctuate around the progress of the US-Iran negotiations, and may exhibit weak and highly volatile performance in the coming week.

Compared to the dramatic fluctuations in the crude oil market, the declines in gold and silver are developing with different logic.

As of press time, international spot gold fell by 0.23% to $4,532.82/ounce, a significant drop from the previous trading day's $4,570. Silver also posted a notable decline—by 18:00 on the 21st, international silver was quoted at $75.41/ounce, down 0.59% from the previous day.

　　

said in a media interview that the recent declines in gold and silver were mainly due to US inflation in April exceeding expectations, especially with a significant rise in the US PPI. This intensified market concerns about persistent high inflation in the US, erasing expectations of a rate cut within the year and increasing the probability of a rate hike. Rising US Treasury yields increase the opportunity cost of holding non-interest-bearing assets such as gold, causing capital outflow. At the same time, India's sharp increase in tariffs paralyzed domestic physical buying, further weakening gold demand.

In terms of silver, Wan Zhe pointed out that its price trend usually follows gold but with a certain lag and much greater volatility. The previous bullish factors for silver prices, such as supply shortages and economic recovery, have also collapsed in line with gold prices retreating, further accelerating the price fall.

Looking ahead, Wan Zhe believes that gold is likely to enter a period of weak oscillation in the short term, with the possibility of continued downside. Special attention should be paid to the situation in the Middle East and recurring inflationary pressures.

In the medium to long term, supportive factors still exist. If US inflation falls back in the third quarter, expectations for a rate cut may reignite; and the strategic buying demand for gold by central banks continues. However, she also noted that the geopolitical risk premium may gradually fade, and emerging markets may sell gold to obtain liquidity, so the medium to long-term outlook remains uncertain.

In Zhao Qingming’s view, since early March, international oil prices and gold prices have shown a "seesaw" relationship: rising oil prices boost inflation expectations and rate hike predictions, thus bearish for gold; falling oil prices do the opposite. But, it should be noted, this "seesaw" is only a short-term phenomenon. Even if oil prices fall in the future, gold prices will not necessarily soar. Once crude oil ceases to be the main factor disturbing global financial markets, other influences on gold—such as the US dollar, Federal Reserve policy, and central bank gold purchases—will take center stage again.

Overall, in the period ahead, the outcome of the US-Iran negotiations and the direction of US inflation data will be key variables determining international oil, gold, and silver prices. For investors, high volatility may only be just beginning.

Some content sourced from Xinhua News Agency, China News Service

　　

　　

Editor: Zhu Henan