Commodity markets continued to react to evolving geopolitical developments in the Middle East, particularly the tentative ceasefire framework between the United States and Iran. While easing concerns over disruptions in the Strait of Hormuz weighed on crude oil prices, precious metals benefited from ongoing uncertainty surrounding the final terms of the agreement and expectations that the Federal Reserve may remain patient on interest rates ahead of this week’s FOMC meeting. Industrial metals remained broadly resilient, supported by favorable long-term demand trends, particularly in copper.
Oil & Gas
Energy markets remained under pressure as traders continued to unwind the geopolitical risk premium that had built up during recent tensions in the Middle East. News that the U.S. and Iran are expected to sign a memorandum extending the ceasefire by 60 days helped ease fears of major supply disruptions through the Strait of Hormuz, a critical route for global energy shipments. As a result, crude oil prices declined sharply for a second consecutive session.
Despite the pullback in crude prices, several uncertainties remain. Shipping activity through the Strait has yet to fully normalize, and reports suggest that clearing maritime routes could take several more weeks. Meanwhile, U.S. Strategic Petroleum Reserve inventories fell to their lowest levels since the early 1980s after another sizeable release, while China reported weaker refinery activity and crude imports, highlighting softer global demand conditions. Major Wall Street firms, including Citi, Goldman Sachs, and Morgan Stanley, responded by lowering portions of their oil price forecasts.
Natural gas prices moved modestly higher as warmer weather forecasts improved demand expectations heading into late June. LNG export activity remains strong, although global supply remains impacted by recent damage to Qatari production facilities and labor disruptions affecting Australian LNG output.
Metals & Mining
Metals markets were mixed but generally constructive as investors balanced improving geopolitical conditions with expectations for a less aggressive Federal Reserve. Gold and silver continued to attract buyers as uncertainty surrounding the final Iran agreement and easing rate-hike expectations supported demand for safe-haven assets.
Copper remained near multi-year highs, reflecting ongoing optimism about long-term supply-demand fundamentals. Several research firms highlighted expectations for a structurally tight copper market driven by electrification, infrastructure investment, and artificial intelligence-related power demand. Scotiabank notably increased its long-term copper price forecasts through 2029, reinforcing the bullish outlook for the sector.
Gold mining equities outperformed the broader market, with both senior and junior gold miner ETFs posting strong gains. Industry executives at recent mining conferences indicated that recent volatility in gold prices has not materially altered capital spending plans or development strategies, suggesting continued confidence across the sector.
Aluminum was the notable laggard, falling to its lowest level in more than two months as improving prospects for shipping through the Strait of Hormuz reduced concerns about supply disruptions.
Markets remain highly focused on two major catalysts: confirmation of the U.S.-Iran ceasefire framework and Wednesday’s Federal Reserve policy announcement. Energy markets are likely to remain sensitive to developments in the Strait of Hormuz and upcoming inventory data, while metals investors continue to favor gold as a hedge against geopolitical uncertainty and copper as a long-term beneficiary of global electrification and infrastructure trends. With volatility moderating but still elevated, commodity markets appear poised to take their next directional cues from central bank policy and geopolitical headlines over the coming days.
Metals Snapshot:
- Gold +0.22% to $4361.1/oz, Monthly (4.4)%, YTD +0.46%:
- Silver +0.51% to $70.54/oz, Monthly (9.04)%, YTD (0.09)%:
- Copper +0.08% to $6.5015/lb, Monthly +3.28%, YTD +14.42%:
- Aluminum (3.29)% to $3419.5/mt, Monthly +0%, YTD +0%:
- Nickel +1.02% to $17810/mt, Monthly +0%, YTD +0%:
- Zinc +0.14% to $3562/mt, Monthly +0%, YTD +0%:
- VanEck Gold Miners ETF +0% to $85.27, Monthly (2.38)%, YTD (0.58)%:
- VanEck Junior Gold Miners ETF +0% to $111.88, Monthly (3.86)%, YTD (1.67)%:
- US Dollar +0.01% to $99.638, Monthly +0.36%, YTD +1.34%:
- CBOE Volatility Index +0.24% to $16.15, Monthly (21.82)%, YTD (2.31)%:
Energy Pre-Market
Oil & Gas:
- Pricing
- WTI (3.1%) to $78.24 (July)
- Brent (2.8%) to $80.86 (Aug)
- Natural gas +1.2% to $3.186 (July)
- RBOB (1.4%) to $2.907 (July)
- ULSD (2.7%) to $3.180 (July)
