Commodity wrap: Oil rebounds over 2% amid fragile US-Iran deal; gold steady

Oil prices rebounded more than 2% on Wednesday after US President Donald Trump threatened to bomb Iran, raising doubts about the peace deal. 

Meanwhile, gold prices remained in the green as investors waited for the first policy decision of the Federal Reserve’s new Chair, Kevin Warsh. 

Among base metals, the three-month copper contract on the London Metal Exchange was at $13,801.38 per ton, largely unchanged from the previous close.

The aluminium contract was 0.7% higher at $3,417.93 per ton. 

Oil rebounds

Oil prices rose more than 2% on Wednesday after Trump threatened to resume bombing Iran if it failed to "behave", though they remained near three-month lows. 

The price of West Texas Intermediate crude oil was at $77.51 per barrel, up 1.9%, while Brent was also 1.9% higher at $80.38 a barrel.

The International Energy Agency warned that the oil market faces a significant supply overhang next year.

In its first assessment of 2027, the IEA projected global supply surging by 8 million barrels per day, while demand grows by only 2 million bpd.

The preliminary US-Iran agreement, whose details have not yet been made public, extends a fragile ceasefire agreed in April by another 60 days to allow time for negotiations toward a permanent truce. 

Industry officials caution that a full recovery to pre-war production and refining levels could still take weeks, months, or even longer.

US crude inventories fell 8.3 million barrels in the week ended June 12, according to market sources citing American Petroleum Institute data.

Gold steady

Gold prices held steady on Wednesday as investors awaited the US Federal Reserve’s first policy decision under new Chair Kevin Warsh, along with further clarity on the US-Iran peace agreement.

The Federal Reserve is scheduled to release its rate decision, policy statement, and updated economic projections at 2 p.m. EDT (1800 GMT). Warsh, who succeeded Jerome Powell last month, will hold a press conference 30 minutes later.

“US rates are expected to remain unchanged, but the real focus will be on Kevin Warsh. Any whiff of hawkishness may weigh on gold which remains highly sensitive to interest rate expectations,” Lukman Otunuga, Senior Research Analyst at FXTM was quoted in a Reuters report.

Spot gold hit a near six-month low last week as inflation concerns linked to the Iran conflict boosted expectations of higher US interest rates.

While gold is traditionally viewed as an inflation hedge, elevated interest rates tend to pressure the metal because it pays no yield.

Prices later rebounded after the US and Iran reached a framework deal.

However, Trump stressed that the agreement is not final and warned he could resume military action if he is unsatisfied with Iran’s conduct.

At the time of writing, the COMEX gold contract was at $4,372.67 per ounce, up 0.4%, while silver was 1.0% higher at $70.750 per ounce.