Crude oil prices closed slightly higher in volatile trading as markets assessed the prospects for a peace agreement between the United States and Iran, while copper and other base metals saw broad gains. Hawkish comments from Federal Reserve Governor Waller prompted markets to increase bets on a Fed rate hike, leading to a decline in gold prices.
Crude Oil: Prices Close Higher Amid Volatility as Market Weighs U.S.-Iran Peace Talks Oil prices fluctuated between gains and losses before settling modestly higher as traders evaluated the potential for a ceasefire agreement between the U.S. and Iran. WTI crude rose 0.3%, closing just under $97 per barrel, marking a weekly decline of 8.4%. The arrival of a key Pakistani mediator in Iran's capital was seen as a sign that negotiations aimed at ending the conflict might be progressing. It remains unclear whether these talks will ultimately yield an agreement, with the market still digesting conflicting statements on key issues. Iran stated that the latest U.S. proposal had narrowed some differences, but comments from Iran's supreme leader regarding maintaining uranium stockpiles, along with disputes over transit fees in the Strait of Hormuz, continue to cloud the outlook. U.S. President Donald Trump has alternated between threatening to resume attacks on Iran and suggesting that both sides are close to a peace deal. Goldman Sachs noted that global crude and refined product inventories are declining at a record pace this month due to persistent supply disruptions from the prolonged Middle East conflict. "In the short term, with WTI falling back below $100 a barrel, oil prices seem to be pricing in some expectation of a deal," said Dennis Kissler, Senior Vice President of Trading at BOK Financial Securities Inc. "Nevertheless, traders are gradually becoming desensitized to the constant stream of negotiation news." WTI for July delivery rose 0.3%, settling at $96.60 per barrel. Brent crude for July delivery gained 0.9%, settling at $103.54 per barrel.
Base Metals: Copper Advances as Traders Assess Middle East Peace Prospects Copper prices rose, with traders evaluating the outlook for a Middle East peace agreement. Optimism surrounding a potential U.S.-Iran ceasefire bolstered U.S. markets, contributing to broad gains across other base metals. Copper prices found support amid renewed arbitrage opportunities and tightening supply in other markets, driven by concerns that the U.S. might impose tariffs on copper imports. Copper withdrawal orders from LME-monitored warehouses recorded their largest single-day increase since 2013 on Friday, suggesting traders may be planning to move inventories to Comex facilities to fetch higher prices. At the close, LME copper rose 1.1% to $13,667.5 per metric ton. LME aluminum gained 0.3% to $3,649.5 per metric ton. LME nickel increased 1% to $18,913 per metric ton. LME zinc advanced 0.6% to $3,543 per metric ton. LME tin climbed 1.7% to $54,174 per metric ton. LME lead edged up 0.4% to $2,011.5 per metric ton.
Precious Metals: Gold Declines on Rising Fed Rate Hike Bets Gold prices fell as markets increased their expectations for a Federal Reserve interest rate hike. Prices dropped as much as 1.1% amid rising bond yields and a stronger U.S. dollar. Federal Reserve Governor Waller warned that energy shocks from the Iran conflict could push inflation higher and noted that the likelihood of the Fed's next rate move being a hike or a cut is roughly balanced. Traders have now fully priced in a 25-basis-point Fed rate hike by December for the first time. Since gold does not yield interest, higher rates typically exert downward pressure on its price. As of 4:40 PM Eastern Time, spot gold declined 0.8% to $4,506.39 per ounce. Spot silver fell 1.6% to $75.4829 per ounce.
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