Oil prices fell as market expectations for US-Iran peace talks resurfaced, anticipating a gradual restoration of shipping through the Strait of Hormuz. Gold prices rose following the US Department of Justice dropping its investigation into Federal Reserve Chair Powell and as investors looked forward to potential negotiations between the US and Iran. Copper prices on the London Metal Exchange declined, while the aluminum price structure continued to signal supply constraints.
Crude Oil: WTI Edges Lower Amid Renewed Hopes for US-Iran Talks Oil prices declined as the market revived hopes for peaceful negotiations between the US and Iran, with expectations that shipping activity through the Strait of Hormuz would progressively resume.
West Texas Intermediate (WTI) futures dropped 1.5%. The White House announced it would dispatch two envoys to Pakistan for discussions with Iranian officials.
However, Tehran expressed a pessimistic tone regarding the prospects for talks.
Reports indicated that Iranian Foreign Minister Abbas Araghchi planned to submit a new written response to the US peace proposal during his visit to Pakistan.
Thierry Wizman, Global FX and Rates Strategist at Macquarie Group, noted that recent developments "suggest traders are increasingly leaning toward the view that the military phase of the US-Iran conflict is ending or has ended, while the economic war is becoming entrenched."
Two US officials familiar with the matter revealed that former President Trump's posts on Truth Social and his decision to maintain a maritime blockade on Iranian ports have adversely affected negotiations being advanced through intermediaries such as Pakistan.
US Defense Secretary Hagerty stated on Friday, "All Iran needs to do is verifiably abandon its nuclear weapons program in a meaningful way. Otherwise, they will watch their fragile economy crumble under continued US pressure. The blockade can last as long as President Trump decides."
The June-delivery WTI futures contract in New York fell 1.5%, settling at $94.40 per barrel.
Brent futures for June delivery settled 0.3% higher at $105.33 per barrel.
Precious Metals: Gold Prices Advance Gold prices moved higher on Friday. Market optimism grew that the US and Iran were moving toward dialogue after days of stalemate. Simultaneously, traders assessed the Federal Reserve's interest rate trajectory after the Justice Department concluded its investigation into Fed Chair Powell.
Bond yields declined and spot gold surpassed $4,700 per ounce after prosecutor Jeanine Pirro stated she would halt the investigation into cost overruns related to the renovation of the Federal Reserve building.
According to informed Pakistani officials, Iranian Foreign Minister Araghchi traveled to Islamabad on Friday, with a second round of US-Iran peace talks anticipated. Iranian media reported that Araghchi was on a "regional visit" that would also include stops in Oman and Russia.
The State Oil Fund of Azerbaijan sold approximately 22 tonnes of gold in the first quarter, valued at over $3 billion at current prices. This move came after a record rally in gold pushed the sovereign wealth fund's allocation to the metal to its upper limit.
As of 3:00 PM ET: Spot gold rose 0.6% to $4,723.3 per ounce. Spot silver increased 1.4% to $76.4695 per ounce.
Base Metals: Copper and Aluminum Decline Spot aluminum in London showed a significant premium to forward-month futures, a condition known as backwardation that indicates tightening supply amid the context of the Iran conflict.
On the London Metal Exchange on Friday, the contract for delivery in one day traded at an $18 per tonne premium to the contract for delivery the next day, marking the widest gap in two years.
At the close: LME copper fell 0.3% to $13,309.5 per tonne. LME aluminum declined 0.8% to $3,591 per tonne. LME nickel increased 1.5% to $19,015 per tonne. LME zinc rose 0.6% to $3,472.5 per tonne. LME tin edged up 0.2% to $50,331 per tonne. LME lead advanced 0.4% to $1,962.5 per tonne.
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