JCPOA talks seemingly stall but Macron remains confident
Oil prices are higher today after falling close to their summer lows over the course of the week. The rebound comes as nuclear talks between Iran and the US appear to have stalled, with the former claiming they had sent a “constructive” response to proposals and the latter quickly deeming them “not constructive”. While Macron remains hopeful that a deal can be concluded in the coming days, I’m not sure everyone else shares his optimism.
If a deal on the JCPOA is reached, that will make next week’s OPEC+ meeting all the more interesting. A deal has been a big downside risk for oil prices recently, something Saudi Arabia sought to counter with warnings of production cuts from the alliance. When and how they would respond isn’t clear but it would certainly create some uncertainty around the meeting.
A major breakout is potentially on the cards
Gold is really struggling amid growing expectations of another 75 basis point rate hike from the Fed this month. After breaking below $1,730 earlier in the week, it didn’t take long for the yellow metal to test support at $1,700, even breaching it briefly yesterday. A strong jobs report today could tip it over the edge, with key support below then coming around $1,680 where it rebounded in July. It has also bottomed here on a few occasions over the last couple of years which adds to its significance as a major support level.
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