Weaker U.S. Dollar Supports Gold While Oil Extends ThreeDay Decline

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On August 5, commodity markets continued to show mixed performance. International crude oil prices fell for a third consecutive session as optimism over diplomatic progress between the United States and Iran eased concerns about potential supply disruptions in the Middle East. Expectations that tensions may continue to de-escalate reduced the geopolitical risk premium that had previously supported oil prices, leading both Brent Crude and WTI Crude to retreat.

In the precious metals market, spot gold extended its gains for a third straight trading day. A weaker U.S. dollar and lower U.S. Treasury yields increased the appeal of gold for international investors. In addition, softer oil prices helped ease inflation concerns, reducing market expectations for further Federal Reserve tightening and providing additional support for gold. Investors are now closely watching the upcoming U.S. JOLTS Job Openings Report, ADP Employment Report, and Nonfarm Payrolls (NFP) for fresh clues on the future direction of U.S. monetary policy.

In the foreign exchange market, the U.S. Dollar Index (DXY) remained under pressure as investors adopted a cautious stance ahead of key U.S. employment data. Market participants believe the labor market figures will play a decisive role in shaping expectations for the Federal Reserve's next policy move. Weaker employment data could strengthen expectations for future rate cuts, while stronger-than-expected results may support the U.S. dollar and weigh on commodity prices.

Industrial metals, including copper, continued to trade within a relatively narrow range. Investors remain focused on China's manufacturing recovery, global infrastructure investment, and long-term demand driven by artificial intelligence (AI), renewable energy, electric vehicles, and power grid expansion. In the absence of stronger macroeconomic catalysts, industrial metals are expected to remain range-bound in the near term.

Market Summary

Overall, commodity markets are gradually shifting from geopolitical-driven trading toward macroeconomic data and monetary policy expectations. Over the coming days, U.S. employment data, movements in the U.S. Dollar Index (DXY), Federal Reserve policy expectations, and developments in the Middle East will remain the key drivers influencing the prices of gold, crude oil, and industrial metals.