Commodity wrap: Oil and gold swing wildly as Iran conflict fuels volatility

Gold and crude oil prices seesawed between positive and negative territories on Monday as the market remained highly volatile. 

Gold prices had fallen earlier in the day before recouping all the losses.

However, prices fell once again as oil reversed its losses. 

Crude oil started the day on the front foot with both Brent and West Texas Intermediate benchmarks climbing to a two-week high before reversing the gains.

At the time of writing, however, prices rose once again as the market experienced extreme volatility. 

Crude oil

Brent crude oil was back above $110 per barrel after dropping nearly 2% earlier in the day.

The drop came after the contract had hit $112 per barrel in the morning session, its highest level in two weeks. 

Prices fell from the peak as reports claimed that the US had accepted waiving sanctions on Iranian crude oil temporarily. 

The Brent contract was last at $110.88 per barrel, up 1.5%, while WTI was 1.8% higher at $102.80 per barrel.

Both contracts advanced more than 7% last week as optimism for a peace deal to halt ship attacks and seizures in the Strait of Hormuz faded. 

Iran’s semi-official Tasnim news agency, citing a source close to the negotiation team, reported that, unlike earlier drafts, the latest US proposal included a concession to suspend oil sanctions against Tehran during the negotiation period.

Pakistan has presented the US with a revised Iranian proposal aimed at ending the Middle East conflict, though peace efforts remain stalled, according to a Reuters report.

Fatih Birol, head of the International Energy Agency, warned the same day that commercial oil inventories are depleting rapidly, leaving only a few weeks of supply.

Concerns of escalation have grown following drone strikes on the UAE and Saudi Arabia, coupled with sharp rhetoric from both Washington and Tehran.

Emirati officials said they were investigating the attack on the Barakah nuclear power plant, stressing that the UAE reserved the right to respond to what it described as “terrorist attacks.”

Axios reported that US President Donald Trump is scheduled to meet national security advisers on Tuesday to discuss possible military options. 

Meanwhile, the Trump administration allowed a Russia-related sanctions waiver to expire on Saturday, a move that had previously enabled countries such as India to continue purchasing Russian seaborne oil.

Gold falls again

Gold had fallen in the morning session on Monday, but recouped its losses as energy prices fell.

However, the precious metal struggled to hold on to gains and was in bear territory once again. 

The relief to the gold market came as lower crude prices eased some inflation concerns, though higher bond yields curbed the yellow metal’s rise. 

Gold, which is traditionally viewed as a safe-haven asset and a hedge against inflation, tends to lose appeal when interest rates are high. 

In such environments, investors often shift toward yield-bearing alternatives like US Treasuries, which offer more attractive returns compared to the non‑yielding metal.

Global government bonds extended their slide on Monday as surging energy prices linked to the Iran war stoked inflation fears and reinforced expectations of further global rate hikes.

Benchmark 10‑year US Treasury yields, which move inversely to prices, climbed to their highest level since February 2025, underscoring the pressure across fixed‑income markets.

At the same time, some banks have begun lowering their near‑term gold price forecasts amid softer investor demand.

JPMorgan was among the first major lenders to cut its 2026 average gold outlook, trimming projections to $5,243 per ounce from $5,708.

At the time of writing, the COMEX gold contract was at $4,540.60 per ounce, down 0.5%, while silver was 0.9% lower at $76.858 an ounce.