(MENAFN- Arab Times) Oil sank this week after a landmark nuclear deal between Tehran and Western powers that would allow Iranian crude to flow back into the already saturated global market. Many other commodities took a heavy knock from the rebounding dollar, with precious metal gold striking a five-year low point. The greenback rallied on news of rising US inflation and after Federal Reserve chief Janet Yellen reaffirmed an interest rate hike by year-end. Greece's latest bailout deal also buoyed the US unit, making many dollarpriced commodities less attractive to buyers using other currencies. Oil: Crude oil prices fell heavily after key crude producer Iran's nuclear energy agreement with major world powers. Britain, China, France, Germany, Russia and the United States clinched a historic deal on Tuesday aimed at ensuring Iran does not obtain the nuclear bomb, opening up Tehran's stricken economy and potentially ending decades of bad blood with the West.
Reached on day 18 of marathon talks in Vienna, the accord is aimed at resolving a 13-year standoff over Iran's nuclear ambitions after repeated diplomatic failures and threats of military action. The deal puts strict limits on Iran's nuclear activities for at least a decade and calls for stringent UN oversight, with world powers hoping that this will make any dash to make an atomic bomb virtually impossible. In return, painful international sanctions that have slashed the oil exports of OPEC's fifth-largest producer and choked its economy will be lifted and billions of dollars in frozen assets unblocked. However, analysts cautioned that it will take time for additional Iranian oil to hit markets. Elsewhere, fears over the Greek debt crisis abated after Athens secured its third international bailout deal with creditors. Greece reached a desperately-needed bailout deal with the eurozone on Monday after marathon overnight talks, in a historic agreement to prevent the country crashing out of the European single currency. However, the euro failed to benefit because the Greek deal made it more likely the Fed would raise rates soon, dealers said. The new rescue for Athens is the country's third since 2010 and came after a bitter six-month struggle following Greek premier Alexis Tsipras's election in January that put Greece's membership of the eurozone in the balance.
By Friday on London's Intercontinental Exchange, Brent North Sea crude for September delivery fell to $56.74 per barrel from $58.68 a week earlier for the August contract. On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for August dropped to $50.34 a barrel from $52.74 a barrel. Precious Metals: Gold dived to $1,131.20 per ounce on Friday, striking a level last witnessed on April 6, 2010, as rising US inflation cemented expectations of an interest rate hike and pushed the dollar higher. Platinum slid to a six-year nadir at $999.95 and sister metal palladium forged a three-year low at $616.65. US consumer prices rose broadly in June, bringing the annual inflation rate back into positive territory, official data showed. The Labor Department said its consumer price index (CPI) rose 0.3 percent in June, a notch below the 0.4 percent gain in May. "The precious metal dropped to a new five-year low " as renewed strength in the US dollar sent commodities lower across the board," said CMC Markets analyst Jasper Lawler. He added: "The US dollar was mostly stronger on Friday, supported by consumer price inflation that met expectations but supported the hawkish stance of Fed Chair Yellen in her two-day testimony to US lawmakers."
In testimony to Congress, Yellen stuck to the position of the Federal Reserve's policy meeting that a hike would come "at some point this year" if "the economy evolves as we expect". By Friday on the London Bullion Market, the price of gold dropped to $1,132.80 an ounce from $1,159.30 a week earlier. Silver fell to $15.01 an ounce from $15.45. On the London Platinum and Palladium Market, platinum tumbled to $998 an ounce from $1,032. Palladium slumped to $621 an ounce from $655. Base Metals: Prices mostly rallied as dealers mulled bright economic growth data in leading base metals consumer China, but gains were then impacted by the rising dollar. "The upswing enjoyed by metal prices on the back of better than expected Chinese data was brought to a halt " by the firmer US dollar," said Commerzbank analysts in a research note to clients.
China's GDP expanded 7.0 percent year-on-year in the second quarter, official data showed Wednesday, beating expectations as central bank policy stimulus helped support the world's secondlargest economy. The gross domestic product figure announced by the National Bureau of Statistics (NBS) matched the 7.0 percent expansion in the first three months of this year, and exceeded the median forecast of 6.9 percent in an AFP survey of 14 economists. By Friday on the London Metal Exchange, copper for delivery in three months fell to $5,507 a tonne from $5,770.50 a week earlier. Three-month aluminium increased to $1,707.50 a tonne from $1,690.50. Three-month lead rose to $1,835 a tonne from $1,794.50. Three-month tin soared to $15,675 a tonne from $13,975. Three-month nickel climbed to $11,465 a tonne from $11,275. Three-month zinc advanced to $2,074 a tonne from $2,005.50. Cocoa: Prices scored more four-year peaks, as the market was pushed higher by supply troubles in key producer Ghana.
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