SunSirs: Monday Commodity Roundup: Iran Risk Pushes Oil Prices Higher; Gold and Silver Hit New Peaks; Copper Surges Then Retreats

Oil prices climbed to their highest level since early December on Monday as the situation in Iran fueled investor concerns over potential supply disruptions from the country. Copper prices pared gains after briefly soaring toward record highs during the session, buoyed by a weaker U.S. dollar and supply worries. Gold and silver hit new highs as a U.S. Justice Department probe into the Federal Reserve raised concerns about central bank independence.

Crude Oil: Investor Worries Over Iran Supply Risks Push Prices to One-Month High

Crude oil prices climbed to their highest level since early December on Monday amid turmoil in Iran, fueling concerns about supply disruptions from the OPEC's fourth-largest producer. Reports indicated U.S. President Donald Trump favored military action against the country.

WTI crude closed above $59 per barrel on Monday after gaining over 6% in the previous three sessions. Trump stated Tehran had proposed negotiations with Washington over its longstanding nuclear program. However, citing informed U.S. officials, reports indicated Trump favors authorizing military strikes against Iran to punish its treatment of protesters.

New political or military turmoil in Iran could threaten the country's daily oil production of approximately 3.3 million barrels.

Iran's foreign minister reiterated the government's stance that mobs and terrorists killed police officers and civilians, while state television broadcast footage claiming calm had been restored nationwide.

Dan Ghali, a commodities strategist at TD Securities, noted that regarding the Iran situation, “Traders must now weigh multiple possibilities: the potential for a smooth transition to regime change; the possibility of a chaotic transition impacting oil production and exports; the risk of military confrontation or miscalculation; and the scenario where regime change leads to an agreement on U.S. terms, which would have the most negative impact on energy markets.”

February WTI crude futures in New York rose 0.6% to settle at $59.50 per barrel;

March Brent crude gained 0.8% to close at $63.87 per barrel.

Base Metals: Copper Prices Retreat After Surge

Copper prices pared intraday gains on Monday after earlier soaring toward record highs, buoyed by a weaker dollar and supply concerns.

Benchmark copper futures on the London Metal Exchange (LME) climbed as much as 2.5% to $13,323 per tonne before paring some gains. Copper on the New York Mercantile Exchange (Comex) also extended gains after breaching the $6-per-pound mark.

Other base metals on the LME similarly retreated after broad gains; aluminum and tin both hit their highest levels since 2022.

Ewa Manthey, a commodities strategist at ING, noted that market volatility and a rebalancing of weights in a benchmark commodity index contributed to the metals sector's pullback. She added that overall metal fundamentals remain unchanged: driven by tight supply and robust demand expectations, metals have continued their upward trajectory since the start of the year.

Copper currently holds a 6.43% weighting in the widely tracked Bloomberg Commodity Index. By comparison, its target weight for 2026 is 6.36%, implying that some copper holdings needed to be sold during the five trading days starting last Thursday. Similar situations exist for aluminum and nickel.

At the close of London markets:

LME copper futures rose 1.6% to $13,209.50 per tonne;

LME aluminum futures rose 1.6% to $3,184.50 per tonne;

LME nickel futures gained 1.1% to $17,888 per tonne;

LME zinc futures climbed 2% to $3,216 per tonne;

LME tin futures surged 5.3% to $47,967 per tonne;

LME lead futures rose 0.2% to $2,053 per ton.

Precious Metals: Fed Probe Pushes Gold, Silver to Record Highs

Gold and silver climbed to record highs amid broad gains in metals markets as the U.S. Department of Justice threatened criminal charges against the Federal Reserve, reigniting concerns over the central bank's independence.

Gold prices surged past $4,600 per ounce, while silver prices soared as much as 8% to break through $86. Federal Reserve Chair Jerome Powell stated that the potential lawsuit “should be viewed within the broader context of the government's threats and ongoing pressure tactics.” The U.S. dollar weakened, while the yield on the 10-year Treasury note edged higher.

The Trump administration's repeated criticism of the Fed was a key factor driving gold and silver prices to record highs last year, and this momentum appears set to continue. Weakening the Fed's ability to curb inflation would put pressure on the dollar and U.S. Treasuries, highlighting the appeal of precious metals as a store of value.

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