Oil and gold prices rise due to Biden's exit from presidential race

Oil

The global benchmark Brent crude price has risen above $83 per barrel after experiencing its largest one-day drop since early June, while West Texas Intermediate was priced around $81. The US dollar weakened at the start of Asian trading, contributing to the increase in commodity prices denominated in the currency.

In Canada, an explosion at an oil site in Alberta has triggered a wave of wildfires. According to Alberta Wildfire and the Alberta Energy Regulator, approximately 348,000 barrels per day are at risk.

This year, oil prices have risen as OPEC+ has restricted production, leading to a reduction in global supplies over the summer in the Northern Hemisphere. Geopolitical tensions have also been a major factor: the conflict between Israel and Hamas and clashes with Iran-backed groups, including Yemen's Houthis, have raised concerns about regional instability potentially impacting production.

Market indicators suggest challenging conditions in the near term. The Brent forward spread - the difference between the two nearest contracts - was more than $1 per barrel in backwardation, a trend toward rising prices. Two weeks ago, the spread was 76 cents.

Gold

Gold bars rose in price by 0.5% at the start of Asian trading.

The bars reached a record level last week, finding support this year as interest rates increased and the Federal Reserve shifted towards monetary policy easing. Lower rates are generally favorable for gold since it does not yield interest.

On July 21, President Biden announced that he would withdraw from the election. Calls, including from within the Democratic Party, for Biden to cancel his candidacy began after disappointing debate performances against his Republican rival, Donald Trump.

Biden has proposed Vice President Kamala Harris as the US presidential candidate. She has agreed.

For more information about Harris, read the article by RBC-Ukraine.