Oil prices increased as traders anticipated the Middle East conflict would persist and further disrupt energy markets. Copper recorded its first weekly gain of the month, driven by signs of recovering demand. Gold prices moved higher, supported by bargain-hunting activity.
**Crude Oil: Prices Climb on Expectations of Continued Supply Disruptions from Middle East Conflict** Oil prices rose as traders projected the Middle East conflict would continue and cause additional disruptions to energy markets. The global benchmark Brent crude advanced 4.2% after erasing earlier losses, settling above $112 per barrel, while WTI closed above $99 per barrel. The U.S. administration extended the deadline for action against Iranian energy infrastructure by ten days. A U.S. official stated that there had been no response from Iran to a proposed 15-point plan for ceasefire negotiations presented by the U.S. government. The conflict with Iran has led to the near-total closure of the Strait of Hormuz, severely impeding this vital global energy transit route. Although ceasefire possibilities were still under discussion on Friday, U.S. and Israeli forces struck Iranian nuclear facilities, prompting retaliatory actions by Iran in the Persian Gulf region. Recent declines in trading activity in the crude market, as traders grew weary of frequent news developments and adopted a wait-and-see approach, have exacerbated price volatility. A market analyst noted that even a swift end to the conflict would likely not undo the widespread physical damage and geopolitical shocks already inflicted. May WTI crude rose 5.2% to settle at $99.64 per barrel. May Brent crude increased 4.2% to settle at $112.57 per barrel.
**Base Metals** Copper posted its first weekly increase this month, supported by indications of stronger demand, despite ongoing market turbulence due to the Middle East conflict. Most industrial metals on the London Metal Exchange (LME) ended higher on Friday, after the U.S. administration again postponed a deadline for Iran to either agree to terms or face additional strikes. However, there was no indication that Tehran would accept Washington's ceasefire demands, and missile exchanges between Iran and U.S. and Israeli forces continued. The conflict, now in its fourth week, has weakened economic growth prospects, weighing on base metals. Aluminum was an exception, as the effective closure of the Strait of Hormuz has blocked approximately 9% of its supply. At the close, LME copper was up 0.4% at $12,195 per metric ton. LME aluminum increased 0.8% to $3,296 per metric ton. LME nickel declined 0.4% to $17,186 per metric ton. LME zinc advanced 1.1% to $3,115 per metric ton. LME tin rose 3.8% to $45,788 per metric ton. LME lead gained 0.3% to $1,896.5 per metric ton.
**Precious Metals** Gold prices rebounded and were on track for their first weekly gain since the outbreak of the Iran conflict, propelled by accelerated bargain-hunting following recent price declines. On Friday, gold climbed as much as 4.1%, surpassing $4,550 per ounce and recouping losses from the previous trading session. Despite the Friday rebound, gold continued to face bearish pressure as doubts grew over the prospects for a ceasefire. U.S. and Israeli strikes on Iranian nuclear and steel facilities were met with retaliatory actions by Iran in the Persian Gulf. In the two weeks following the outbreak of the conflict, the Turkish central bank sold and swapped approximately 60 metric tons of gold, adding to the downward pressure on gold prices. As of 4:24 PM Eastern Time, spot gold was up 3% at $4,509.08 per ounce. Spot silver increased 2.8% to $69.9815 per ounce.
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