Commodity wrap: Gold hits lowest level since March 23; oil rebounds

Gold prices continued to slump on Wednesday as a fresh escalation in tensions in the Middle East dampened sentiments in the market. 

Oil rebounded from sharp losses on Tuesday as prices jumped more than 2% after both the US and Iran traded military strikes overnight. 

Meanwhile, both copper and aluminium contracts on the London Metal Exchange fell due to mixed data from China. 

China’s latest trade data show mixed signals. Unwrought copper imports rose 4.4% year-on-year to 445,700 tons in May, though year-to-date volumes remained down 7% year-on-year at 2.01 million tons.

This reflects higher domestic refined output, according to ING Economics.

Copper concentrate imports fell 1% on-year in May, with year-to-date volumes down 1.4%.

In ferrous markets, iron ore imports declined 0.4% on-year and 5.9% on-month to 97.7 million tons.

On the export side, shipments of unwrought aluminium and products rose 15.5% on-year to 632,400 tons. 

“This is the highest since November 2024, as producers responded to stronger overseas demand following supply disruptions from the Middle East,” Ewa Manthey, commodities strategist at ING Economics said in a note.

Gold hits multi-month low

Gold prices on COMEX dipped to $4,140.62 per ounce on Wednesday, its lowest level since March 22. 

Gold dropped more than 2% on Wednesday as fighting in the Middle East dashed hopes of a resolution to the US–Israeli war with Iran, reigniting concerns over inflation and higher interest rates.

Iran’s Revolutionary Guards said they launched missile and drone strikes on US military bases in Jordan, Kuwait, and Bahrain in retaliation for American attacks on Iranian targets near the Strait of Hormuz. 

The clashes marked one of the largest escalations since the two countries agreed to a ceasefire in April.

Bullion has now fallen more than 20% since the US-backed war with Iran began in late February. The conflict has driven oil prices sharply higher, intensifying inflation fears and expectations of tighter monetary policy.

Although gold is traditionally viewed as a hedge against inflation, rising interest rates tend to weigh on the non-yielding metal. 

Traders are currently pricing in a 68% chance of a US rate hike in December, according to the CME FedWatch tool.

Oil rebounds

Oil prices climbed on Wednesday after US President Donald Trump lashed out at Iran in a Truth Social post, following overnight tit‑for‑tat strikes between the two countries.

At the time of writing, the Brent crude oil price was at $93 per barrel, up 1.7%, while West Texas Intermediate was at $90.10 a barrel, up 2.2%. 

Crude had traded largely steady through the European morning session but jumped after Trump warned he was close to ordering new strikes against Iranian power plants and bridges, saying Tehran was taking too long to reach a deal, according to Fox News. 

The US military had already hit Iranian targets after Trump vowed to respond to the downing of a US Apache helicopter.

The latest exchanges shifted traders’ focus back to war risks and potential supply disruptions. 

“While diplomatic efforts remain ongoing, the latest military exchanges have reintroduced a geopolitical risk premium into oil markets,” Priyanka Sachdeva, senior market analyst at Phillip Nova, was quoted as saying in a Reuters report.

Tehran, meanwhile, warned it would resume hostilities if Israel continued attacking Hezbollah in Lebanon.

Israel’s refusal to halt its campaign against the Iran‑backed militia has complicated Trump’s efforts to extend a fragile ceasefire into a lasting settlement.

Global stock draws are supporting prices, but weaker Chinese crude imports are keeping a lid on gains. 

“A limited flow of shipping through the Strait of Hormuz could also be capping prices,” said PVM analyst Tamas Varga, noting that traffic remains well below pre‑war levels despite some vessels transiting.

Analysts at JP Morgan forecast Brent to average around $100 a barrel through most of the remainder of 2026. 

Iran has continued to block most shipping through the Strait, which normally carries a fifth of the world’s crude oil and liquefied natural gas, while Washington has imposed its own blockade of Iranian ports.

US Energy Secretary Chris Wright said Tuesday that ship traffic in the Gulf and exports through the Strait are rising, even as Washington and Tehran struggle to reach a deal to end their more than three‑month‑old war.