Brent crude collapsed 10% as investors bet the Iran conflict could end sooner. Copper drifted slightly lower as traders assessed how the post-midterm political landscape might affect economic growth and demand. Gold climbed above $4,000 an ounce, with a weaker dollar and falling US Treasury yields boosting the metal's appeal.
Crude Oil: Brent Plunges 10% as Market Bets on a Quicker End to the Iran Conflict
Brent crude futures tumbled 10%, falling below $100 a barrel. Investors wagered that a sweeping Democratic victory in the US midterm elections could help bring the months-long Iran conflict, which has disrupted global energy markets, to a faster conclusion. Brent touched $93.22 a barrel during the session before settling at its lowest level since August 31. Traders digested the US midterm election results, which were widely seen as a referendum on the cost of living and the war. WTI dropped 8.3% to settle near $88 a barrel, its biggest decline since May. Wednesday's selloff also triggered selling by trend-following commodity trading advisors. Oil slid again sharply after US Vice President Vance attributed the Republican defeat to overseas conflicts. "Given the election outcome and Iran's economic situation, it does look more likely that a deal can be reached," said Ajay Parmar, head of energy at ICIS. "Trump's power has been significantly weakened." Blocked supply from the Persian Gulf, along with escalating Ukrainian attacks on Russian refineries, had also pushed fuel prices higher. US Energy Information Administration data showed US diesel inventories fell below 100 million barrels for the first time since 2003. January Brent fell 8.7% to settle at $94.62 a barrel; December WTI fell 8.3% to settle at $88.12 a barrel.
Base Metals: Copper Edges Lower
Copper prices edged slightly lower as traders evaluated how the divided situation created after Democrats swept Congress might affect economic growth and demand. Investors began questioning whether a Democratic-controlled Congress would impede data center and related infrastructure construction, while copper demand from AI infrastructure was one of the main factors that drove copper prices to a record high in September. Li Xuezhi, head of research at Chaos Ternary Futures Co., said that after the Democratic victory, stricter scrutiny of the AI industry will continue to weigh on copper prices, although short-term price fluctuations are possible. At the close, LME copper fell 0.2% to $14,011 a ton; LME aluminum rose 0.1% to $3,047 a ton; LME nickel rose 2.8% to $15,779 a ton; LME zinc rose 0.4% to $3,807 a ton; LME tin fell 0.9% to $46,995 a ton; LME lead fell 0.1% to $1,881.5 a ton.
Precious Metals: Gold Breaks Above $4,000 an Ounce
Gold rose above $4,000 an ounce after Democrats swept both chambers of Congress, sending the dollar and US Treasury yields lower and boosting the metal's appeal. Gold gained as much as 3.6%, its biggest advance since mid-August. Investors believe that Democratic control of both chambers of Congress could produce political gridlock, thereby limiting further fiscal expansion. "More broadly, the market now hopes that a change in the policy path will ultimately help fight inflation," said Joshua Kutin, head of North America multi-asset solutions at Columbia Threadneedle. "Oil is part of that, but more importantly, the market expects newly elected politicians to directly tackle the problem of high prices." As of 4:53 p.m. New York time, spot gold rose 3.3% to $4,060.42 an ounce; spot silver rose 4.9% to $52.2192 an ounce.
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