Commodity wrap: Oil climbs on US–Iran tensions; gold, silver extend losses

Oil prices have continued to rise on Thursday as geopolitical tensions simmered with the latest US strikes against Iran. 

Gold and silver extended their losses as higher energy prices and expectations of elevated interest rates for longer dampened sentiments in the precious metals market. 

Gold prices had rebounded slightly earlier in the day, but failed to defend the gains. 

Meanwhile, copper prices fell slightly on the London Metal Exchange on Thursday, while aluminium rose 0.2% from the previous close. 

Oil gains 

Oil prices rose on Thursday after US President Donald Trump warned that the United States would strike Iran “very hard tonight” and soon take control of the country’s oil and gas infrastructure and markets. 

The remarks came amid escalating hostilities, with Tehran declaring the Strait of Hormuz closed following fresh US strikes and Trump’s vow of further attacks if no peace deal is reached.

Despite the rhetoric, three Iranian sources and a European official told reporters that Washington and Tehran were exchanging messages on a draft memorandum after reaching a political understanding. 

Key issues still under discussion include mechanisms for releasing billions of dollars in frozen Iranian funds.

Weaker Chinese fuel demand is also tempering the Iran-driven rally, with gasoline and diesel consumption falling alongside lower crude imports. 

Iran’s joint military command announced the Strait’s closure to oil tankers and commercial ships, warning that any vessel attempting passage would be fired upon.

The US military countered on Wednesday, saying via X that commercial ships continued to transit the Strait and no American warships had been hit, despite Iranian state media claims of missile and drone strikes. 

Shipping data from LSEG and Kpler showed three LNG tankers slipping out of Hormuz with transponders off, bound for Asia, though the timing of their departures remains unclear.

India reported another incident involving a vessel off Oman’s Shinas port earlier Thursday, the third such case this week. Still, Indian refiners told Reuters they had secured sufficient crude supplies to cover demand through at least August. 

Abu Dhabi National Oil Co and other sellers managed to export some crude and offered volumes to Asian buyers.

Meanwhile, US crude inventories fell sharply.

The Energy Information Administration said stockpiles dropped by 7.2 million barrels to 426.5 million in the week ended June 5, compared with expectations for a 4 million-barrel draw.

The larger-than-expected decline added further support to prices already buoyed by geopolitical tensions.

Gold slips more

Spot gold has slumped more than 22% since the US–Israeli war on Iran began in late February, a conflict that also sent oil prices sharply higher. 

Elevated crude costs are stoking inflationary pressures and reinforcing expectations that interest rates will remain higher for longer.

While gold is traditionally seen as a hedge against inflation, rising rates typically weigh on the non‑yielding metal.

Fresh data released Wednesday showed US consumer inflation rising at its fastest pace in three years during May, driven by surging energy prices. 

The Federal Reserve is expected to keep rates unchanged at next week’s meeting, the first chaired by Kevin Warsh. A Reuters poll of economists suggests most expect policy to remain steady throughout 2026.

However, market pricing points to a different risk. Traders are currently assigning a 67% probability of a US rate hike in December, according to the CME Group’s FedWatch tool, underscoring the tension between inflationary pressures and the Fed’s cautious stance.

Meanwhile, the number of Americans filing claims for unemployment benefits rose slightly last week, pointing to continued labor market resilience in early June.

Initial ​claims for state unemployment benefits rose 4,000 to a seasonally adjusted 229,000 ‌for the week ended June 6, the Labor Department said on Thursday. Economists polled by Reuters had forecast 219,000 claims for the latest week.

"Markets will continue to focus on incoming US economic data and any shifts in Fed expectations. Developments in the Middle East, meanwhile, remain an important source of headline risk for precious metals." Ewa Manthey said in a note.

At the time of writing, the COMEX gold was at $4,096.70 per ounce, down 0.9%, while silver was 1.7% lower at $63.630 an ounce.