Oil prices gained on the last day of the week as no breakthrough has been reached in the US-Iran peace negotiations, which is likely to keep supply restricted in the Strait of Hormuz.
Meanwhile, gold has had a difficult past five days as prices are likely to experience losses for the second straight week.
Silver was also slightly down on Friday due to the rising dollar and Treasury yields in the US.
Among base metals, both aluminium and copper contracts on the London Metal Exchange rose as the market remained resilient, according to Commerzbank AG.
Oil gains
Oil prices advanced on Friday as traders grew skeptical about the chances of a breakthrough in US-Iran peace negotiations and positioned themselves ahead of the US summer driving season.
Despite the day’s gains, crude remained set to close the week lower.
At the time of writing, the price of West Texas Intermediate crude oil was at $97.19 per barrel, up 0.8%, while Brent was at $103.42 per barrel, up 0.8%.
On a weekly basis, Brent crude ended more than 4% lower, and WTI slipped over 7%, with prices swinging sharply as sentiment shifted around the prospects for a US–Iran peace deal.
A diplomatic source in Islamabad told Iran’s state news agency IRNA that Pakistan’s army chief had departed for Tehran, while a senior Iranian official told Reuters that differences with Washington had narrowed.
US Secretary of State Marco Rubio also spoke of “some good signs” in the negotiations. Even so, the two sides remain at odds over Tehran’s uranium stockpile and the question of controls on the Strait of Hormuz.
Although hopes of a deal between the US and Iran have recently put oil prices under some pressure again, Brent crude has now firmly established itself well above USD 100 per barrel.
“After all, the longer the Strait of Hormuz remains closed, the more we will have to rely on stockpiles”, the analyst added.
Gold set for weekly loss
Gold prices slipped on Friday, heading for a second consecutive weekly decline as a stronger dollar and rising oil costs kept inflation worries front and center, reinforcing expectations of a US interest rate hike.
Benchmark US 10‑year Treasury yields pared earlier losses but continued to hover near their highest levels in more than a year, eroding demand for the non‑yielding metal.
Analysts noted that surging energy prices tend to intensify inflationary pressures and could prompt central banks to keep interest rates elevated for longer.
While gold is often seen as an inflation hedge, higher rates weaken its appeal by raising the opportunity cost of holding bullion.
Traders have now priced in a 58% probability of at least one 25‑basis‑point hike by the Federal Reserve before December, according to CME Group’s FedWatch tool.
Fed Governor Christopher Waller, who had previously supported lower rates, said the central bank should abandon its “easing bias,” effectively signaling openness to tightening policy.
Meanwhile, US consumer sentiment fell to a record low in May, with a survey showing that surging gasoline prices have heightened concerns over affordability and economic strain.
“In addition, the minutes of the last Fed meeting revealed that a majority on the Open Market Committee warned that interest rate hikes would have to be considered should inflation remain above the 2% target,” Thu Lan Nguyen, head of FX and commodity research at Commerzbank, said in a report.
With this reassessment of Fed policy, the potential for a setback for gold is now rising in the event of a renewed escalation of the crisis in the Middle East.
The COMEX gold contract was last at $4,515.75 an ounce, down 0.6%, while silver was at $76.096 per ounce, down 0.8%.
Copper pulls back
Base metals have held up relatively well in recent weeks despite elevated oil prices, supported in part by the absence of clear signs of economic slowdown in the United States and China, according to Lambrecht.
Copper, however, has retreated about 5% from its mid‑May peak, a decline largely attributed to broader risk aversion stemming from rising energy costs.
Market‑specific developments would normally have lent support: China’s copper output in April was 4.5% lower than in March and only 3% higher than a year earlier.
In fact, monthly production has already exceeded April’s levels on four occasions, a disappointing outcome given that the high prices of sulfuric acid—a byproduct of copper smelting—should have encouraged greater output.
“Nevertheless, the first four months of the year still show an increase of nearly 9%,” Lambrecht added.
The three-month copper contract on the LME was at $13,669 per ton, up 1.1% from the previous close.
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