Crude oil prices advanced on Monday as U.S.-Iran peace negotiations remained deadlocked, dimming hopes for a swift reopening of the Strait of Hormuz. Gold prices declined, falling below $4,700 per ounce. Nickel prices climbed close to a two-year peak, driven by tightening supply prospects.
Crude Oil: WTI Rises as U.S.-Iran Impasse Keeps Hormuz Strait Effectively Closed Oil prices increased following a stalemate in efforts to restart peace talks concerning the Iran conflict, leaving the Strait of Hormuz nearly impassable and prolonging supply disruptions in global markets. WTI crude futures gained 2.1%, settling above $96 per barrel, while Brent crude settled near $108. White House Press Secretary Caroline Leavitt stated that former President Trump convened his national security team to discuss an Iranian proposal but did not specify the details of the offer or the U.S. response. WTI crude for June delivery rose 2.1% to settle at $96.37 a barrel. Brent crude for June delivery increased 2.8%, settling at $108.23 a barrel. Monday's developments highlighted the persistent gap in understanding between U.S. and Iranian negotiators, reinforcing the view that a resolution is unlikely in the near term. Over the weekend, Trump called off a trip by senior envoys to mediator Pakistan. Iran stated it would not negotiate under threat. Dennis Kissler, Senior Vice President of Trading at BOK Financial Securities, noted that the likelihood of a near-term peace agreement remains low as the U.S. continues to insist that Iran abandon its nuclear capabilities. On Saturday, Trump directed envoys Jared Kushner and Steve Witkoff to cancel their trip to Pakistan, later telling reporters that Iran had "offered a lot but not enough." Iran's top diplomat met with mediators in Pakistan but left Islamabad before the scheduled arrival time of the U.S. envoys. Iranian President Masoud Pezeshkian stated that Iran would not be "forced to negotiate under threat or blockade." Now in its ninth week, the Iran conflict has driven energy prices higher and caused shortages of key products, such as liquefied petroleum gas in India. The International Energy Agency has described the conflict as causing the largest supply disruption in history.
Precious Metals: Gold Declines Gold prices moved lower on Monday, dipping below $4,700 per ounce, as the deadlock in U.S.-Iran talks persisted. A report from Axios indicated that Iran presented the U.S. with a new proposal to reopen the Strait of Hormuz while delaying talks on its nuclear program. Over the weekend, Trump canceled a planned trip by his envoys to Pakistan, while Tehran reiterated it would not negotiate while under threat. Dilin Wu, Research Strategist at Pepperstone Group Ltd., commented, "Unless we see a more durable reopening of the Strait of Hormuz or a credible path to a peace agreement, any renewed upside for gold is likely to be temporary, with prices expected to remain range-bound." The de facto closure of the Strait of Hormuz continued to push oil prices higher on Monday. The energy supply shock has increased inflationary risks, raising the possibility that central banks will maintain current interest rates for longer or even hike them, which pressures non-yielding gold. Since the outbreak of the Iran conflict in late February, gold has fallen approximately 10%. Nicky Shiels, Head of Research and Metals Strategy at MKS PAMP SA, noted in a report that gold currently suffers from "a lack of market conviction, with large capital remaining on the sidelines and physical demand mixed. The term 'adrift' perhaps best describes the current market state." As of 3:15 PM ET: Spot gold was down 0.6% at $4,680.14 per ounce. Spot silver declined 0.3% to $75.5303 per ounce.
Base Metals: Nickel Touches Two-Year High Nickel prices reached their highest intraday level in nearly two years, supported by a tightening supply outlook due to mining quota cuts in key producer Indonesia and a global sulfur shortage. Since the start of the Iran conflict, nickel futures on the London Metal Exchange have gained about 7%. The conflict has driven a sharp increase in the price of sulfur, a key reagent in nickel processing, and heightened concerns over disruptions to global mining activity. Nickel prices rose as much as 2.8% on Monday before giving up most of those gains. Other base metals showed mixed performance as efforts to resume U.S.-Iran peace talks remained stalled. At the close of London trading: LME copper fell 0.7% to $13,213 per metric ton. LME aluminum declined 0.4% to $3,578 per metric ton. LME nickel gained 0.4% to $19,097 per metric ton. LME zinc dropped 2.2% to $3,398 per metric ton. LME tin decreased 2% to $49,336 per metric ton. LME lead edged down 0.1% to $1,960 per metric ton.
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