Oil prices remained volatile on Friday as the market assessed the two-week ceasefire between the US and Iran.
Both Brent and West Texas Intermediate crude oil benchmarks rose 1% at the time of writing. Earlier in the sessions, prices were in the red.
Meanwhile, gold dipped on Friday, but was headed for its third weekly gain as hopes for an interest rate reduction in the US boosted demand.
Additionally, investors are closely watching upcoming weekend talks between Iran and the US to assess the durability of the fragile ceasefire, a development that is keeping copper prices steady near a three-week high.
Oil set for biggest weekly drop since 2025 June
Oil prices, though still high at around $100 a barrel, are on track for their largest weekly drop since last June. This is despite ongoing concerns about supply issues, specifically from Saudi Arabia and restricted transit through the Strait of Hormuz.
At the time of writing, Brent crude was at $97.30 per barrel, up 1.5%, while WTI was also 1.5% higher at $99.37 a barrel.
Following the ceasefire agreed upon by Iran and the US on Tuesday—a deal brokered by Pakistan—both oil contracts have experienced an approximately 12% loss this week.
The US alleges that Iran continues to obstruct the Strait of Hormuz, even as President Donald Trump issued a warning against Tehran imposing transit fees on tankers using the waterway.
Meanwhile, Iran has demanded that Israel cease its attacks on Lebanon.
“It seems likely that oil traders will want to stay relatively flat going into the close ahead of US and Iranian negotiations due to take place this weekend,” said David Morrison, senior market analyst at Trade Nation.
As Tehran mandated that vessels remain within its territorial waters, traffic through the Strait of Hormuz was significantly reduced, registering at less than 10% of typical volumes, demonstrating the nation’s control.
Ship-tracking data released on Friday indicated that most of the vessels that recently transited the Strait of Hormuz had connections to Iran.
“Even if transit through the Strait of Hormuz resumes, the return of energy supplies is unlikely to be immediate,” Warren Patterson, head of commodities strategy at ING Group, said in a note.
Output has already been reduced at oil and gas fields, while refinery operations have been curtailed or temporarily shut, suggesting that some supply disruptions may take weeks, or longer, to fully reverse.
Gold set for weekly gain
Despite a dip on Friday, gold is still set for a third weekly gain. The metal’s price was pressured by a stronger dollar and ongoing uncertainty surrounding the US-Iran ceasefire.
However, the prospect of earlier and more significant US interest rate cuts has supported non-yielding bullion, counteracting these negative factors.
A stronger dollar index made bullion, which is priced in the greenback, costlier for those holding other currencies on Friday.
The two-day-old ceasefire has stopped the US and Israeli air strikes on Iran, but it has not yet resolved the blockade of the Strait of Hormuz. Furthermore, the parallel conflict between Israel and Iran’s Hezbollah allies in Lebanon continues.
US consumer prices saw their largest increase in nearly four years in March, a rise driven by the persistent impact of tariffs and the boost to oil prices from the ongoing conflict.
Although gold is traditionally viewed as a safeguard against inflation and geopolitical instability, its appeal diminishes in a high-interest-rate environment because it does not offer a yield.
Furthermore, persistently elevated inflation restricts central banks’ capacity to lower interest rates.
The COMEX gold contract was last at $4,789.10 per ounce, down 0.6%, while silver was 0.2% lower at $76.278 an ounce.
In significant developments, Poland confirmed its intention to expand its gold reserves to 700 tonnes.
Concurrently, China made a substantial gold purchase in March, adding approximately 5 tonnes, which represents its largest monthly acquisition in over a year.
Copper rises
Base metal markets are mixed due to ongoing uncertainty from the Iran war. Following initial gains after the ceasefire, most prices have recently declined, with only copper remaining significantly higher than at the start of the week.
At the time of writing, the three-month copper contract on the London Metal Exchange was at 12,853.70 per ton, up 1.2% from the previous close.
Given the probable complexity of peace negotiations involving the US, Israel, and Iran, short-term setbacks should be anticipated occasionally.
Following an agreement between Tehran and Washington to temporarily halt hostilities for two weeks, base metal prices initially soared earlier this week.
This surge was driven by optimism that global demand would be shielded from a more severe impact due to escalating energy costs. However, base metals have since retreated as Trump continued his aggressive rhetoric towards Iran.
On Saturday, US Vice President JD Vance is scheduled to head the US delegation for discussions in Islamabad, Pakistan’s capital.
Trump expressed optimism about the possibility of reaching a deal, though he also criticised Iran for doing a “very poor job” of facilitating oil passage through the vital Strait of Hormuz.
“However, we anticipate that uncertainty will continue to decline in the coming weeks, provided it becomes apparent that talks are continuing and a new escalation therefore seems unlikely,” Thu Lan Nguyen, head of FX and commodities at Commerzbank AG, said in a report.
In this environment, most metal prices are likely to continue their recovery.
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