Commodity Capsule: Brent crude slips; gold rises; copper mixed

Commodity Capsule: Gold prices rose on Monday and were in sight of record highs.

Safe haven demand for the yellow metal was boosted by Iran’s attack on Israel, although strength in the dollar limited major gains.

Markets were waiting to see just how Israel would respond to Iran’s strike, given that the attack caused limited damage, and that Tehran said the move concluded its offensive against Israel.

June gold futures steadied at $2,373/ounce after hitting a record high of $2,449 an ounce, in the previous session.

The biggest point of support for gold prices was tensions brewing between Iran and Israel over the weekend, in supposed retaliation for an attack on an Iranian embassy in Syria.

The US appeared to be making attempts to de-escalate the situation, stating that it would not engage in any retaliatory action against Iran.

This notion, coupled with recent strength in the dollar, put a cap on greater gains in gold.

Yellow metal’s outlook was also muddied by the prospect of higher-for-longer US interest rates, following hotter-than-expected inflation readings last week.

Copper prices mixed after weak China data, aluminium rallies.

Copper prices were a mixed bag on Monday amid pressure from a stronger dollar and weak economic signals from China.

LME copper rose to $9,458/ton, hovering close to two-year highs, on expectations of tighter supplies as major Chinese refiners signaled supply cuts.

Russian copper exports were slapped with new sanctions by the US and the UK.

Gains were capped due to dulled optimism by weak inflation and trade readings from China last week.

Meanwhile, aluminum prices rallied on Monday on the prospect of tighter supplies, as the US and UK placed new sanctions on Russia over its invasion of Ukraine.

Aluminum futures on the London Metal Exchange surged past $2,600/ton, hovering at the highest level since February 2023.

Oil prices fell during trade on Monday.

Market participants dialed back risk premiums following Iran's attack on Israel late on Saturday which the Israeli government said caused limited damage.

Brent futures June delivery edged lower to stay close to $90 a barrel mark. WTI May delivery hovered close to $85/barrel.

Experts note that Iran currently produces over 3 million BPD of crude oil as a major producer within OPEC, and supply risk includes more strictly enforced oil sanctions.

Also, they expect Israel's response to include targeting Iran's energy infrastructure.

Citi Research said prolonged tensions through the second quarter this year have largely priced oil at $85-90 per barrel.

Any de-escalation could see prices falling back quite sharply to the high $70s or low $80s per barrel range.

Catch the latest stock market updates here. For all other news related to business, politics, tech and auto, visit Zeebiz.com.

DISCLAIMER: The views and investment tips expressed by investment experts on zeebiz.com are their own and not those of the website or its management. zeebiz.com advises users to check with certified experts before taking any investment decisions.