NY crude oil futures rebounded on the 2nd after three sessions of declines, with position-squaring buying dominating ahead of the US Independence Day holiday weekend. The front-month WTI contract settled at $68.69 per barrel, up $0.11 from the previous day. Prices had briefly touched $67.04 in early trading—a roughly four-month low—on optimism over progress in US-Iran negotiations, but buying emerged after the selling wave subsided. Meanwhile, gold futures extended their rally, with the most active August contract surging $43.30 to settle at $4,125.70 per troy ounce, breaking through the $4,100 threshold. The move was driven by the June US employment report, which showed nonfarm payroll growth falling short of market expectations, dampening speculation of an early Federal Reserve rate hike and boosting the appeal of the non-yielding asset.
Crude oil futures rebounded on the New York Mercantile Exchange on the 2nd, snapping a three-session losing streak. Position-squaring buying dominated ahead of the US Independence Day holiday weekend, with the front-month August contract for WTI (West Texas Intermediate) settling at $68.69 per barrel, up $0.11 from the previous day. Gold futures, meanwhile, extended their gains, with the most active August contract on the COMEX settling at $4,125.70 per troy ounce, decisively breaking above the psychologically important $4,100 level.
Crude prices had briefly dipped to $67.04 in early trading, marking the lowest level for a front-month contract since late February. Selling pressure initially dominated as market participants weighed prospects for progress in negotiations between the US and Iran. However, with many traders taking time off ahead of the three-day weekend—stemming from the July 3rd Independence Day substitute holiday—buying aimed at adjusting positions gradually gained the upper hand.
On the previous day, July 1st, WTI had settled at $68.58 per barrel, down $0.92 and near a four-month low. According to a social media post by a Qatari Foreign Ministry spokesperson on the evening of the 1st, Qatar and Pakistan had separately concluded discussions with US and Iranian negotiators, with an agreement to resume talks following a series of ceremonies, including the funeral of Iran's former Supreme Leader Ali Khamenei, who was killed by US military forces. Reports also indicated that US President Trump told reporters the negotiations were progressing "very smoothly," fueling market expectations for easing Middle East tensions and a recovery in crude oil supply.
Additionally, speculation that the number of vessels transiting the Strait of Hormuz is on a recovery trajectory continued to cap upside momentum in crude futures. The weekly petroleum inventory report released by the US Energy Information Administration (EIA) on the 1st showed that crude and gasoline stockpiles declined more than market expectations, but distillate fuel inventories, including diesel, increased contrary to forecasts. Phil Flynn of Price Futures Group noted, "The data was mixed, but the prevailing view is that Middle Eastern nations will rush to restore production to capture market share. There is a strong perception in the market that ample supply will be available going forward."
Nevertheless, during the 2nd session, buybacks emerged after the initial selling wave subsided, allowing prices to pare losses and settle in the upper $68 range. Amid thin trading ahead of the holiday, the move appeared to reflect a wave of short-covering aimed at locking in profits.
Gold futures extended their rally, with the most active August contract on the COMEX settling at $4,125.70 per troy ounce, up $43.30, or 1.1%, from the previous day. The June US employment report released on the 2nd showed nonfarm payroll growth falling short of market expectations, while figures for April and May were also revised downward. This development dampened speculation of an early interest rate hike by the US Federal Reserve, fueling buying interest in gold—a non-yielding asset—as its investment appeal increased.
On the previous day, July 1st, gold futures had already staged a sharp rebound, driven by the June ADP National Employment Report showing private-sector job growth below expectations, as well as comments from Fed Chair Warsh indicating that inflation risks had moderated in recent weeks. Speculation surrounding US monetary policy has become a major source of volatility for gold prices.
A growing number of market participants believe that if the slowdown in US employment conditions becomes more pronounced, the Federal Reserve could move toward cutting interest rates. In a declining rate environment, the relative holding cost of gold—which pays no interest—decreases, providing a tailwind for gold futures. For crude oil markets, meanwhile, the tug-of-war between receding geopolitical risks in the Middle East and concerns over a global economic slowdown is expected to persist, with many analysts anticipating continued volatile price action in the near term.
