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Crude oil gains further on Middle East Conflict

Comex Gold prices experienced a decline as it trade below $2,665 per ounce, pressured by a stronger US dollar. This strengthening in dollar fueled by increased bets on more dovish monetary policies from both the Bank of Japan and the Bank of England. The anticipation of lower interest rates from these central banks, coupled with the new Japanese Prime Minister's warning against rate hikes, further weighed on gold prices. Investors are now focusing on Friday's nonfarm payrolls report, which could affect the Fed's monetary policy outlook. While a strong jobs report might reduce expectations for aggressive rate cuts, lower interest rates generally favor gold, as it is a non-interest-bearing asset. WTI Crude oil continue to surge to trade above $71.6 per barrel on escalating tensions between Israel and Iran. Traders are concerned that a retaliatory strike by Israel could disrupt oil supply from the Middle East, a region that accounts for a significant portion of global production. Analysts estimate that a major attack on Iran's export capacity could remove up to 1.5 million barrels of daily supply from the market. The ongoing crisis in the Middle East continues to create uncertainty and volatility in the oil market. LME base metals edged moderately lower after two days of higher trading suggests that the rally driven by the stimulus may have reached its peak. The prices have rose during last two sessions amid China's recent efforts to stimulate its economy, hoping these measures will boost demand and revive the struggling real estate sector. LME Copper is down 0.71% at $10,012 per ton while Aluminium and Zinc is up 0.40% and 0.83% respectively. European natural gas dropped by 1.6% on Thursday mainly attributed to expectations of sufficient gas supplies within the region. The storage sites are 94% full, and production from countries like Norway anticipated offsetting any disruptions from external sources. Additionally, mild weather forecasts for the upcoming week suggest reduced heating demand. Bloomberg Intelligence analysts highlight a structural decline in Europe's gas consumption, which is 22% lower compared to 2021 levels. Today, investors awaiting unemployment claims and ISM services PMI data for further insights into the U.S. economy.

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