Gold prices reversed early losses to gain more than 1.5% as the dollar fell, while energy prices retreated. However, gold was set for its second straight monthly decline.
Brent crude oil prices surged to more than $125 per barrel to hit a four-year high earlier on Thursday. However, prices fell sharply due to concerns about poor demand for the commodity.
Copper prices fell due to poor demand, while aluminium was largely steady on the London Metal Exchange on Thursday.
“Copper is trading with limited conviction as restocking from Chinese fabricators ahead of the Labour Day holiday provides intermittent support while broader demand signals remain mixed,” Neil Welsh, head of metals market at Britannia Global Markets, said in a note.
A stronger dollar environment is supported by the Federal Reserve’s decision to maintain policy rates.
This increases the opportunity cost of holding commodities, which is likely to limit upside movement in base metals, even in markets experiencing physical supply shortages.
Gold gains, but heads for monthly loss
Despite being on track for a second consecutive monthly drop, gold prices gained over 2% on Thursday, supported by a weakening US dollar and a decline in oil prices.
However, concerns about inflation stemming from the ongoing Iran conflict continue to temper the outlook for potential rate cuts.
The COMEX gold contract was up 1.6% at $4,635.55 per ounce.
The dollar experienced a sharp decline following strong indications from Japanese officials regarding potential intervention to bolster the yen.
Consequently, a weaker dollar makes dollar-denominated metals cheaper for those holding different currencies.
Earlier in the session, global oil prices had reached a four-year peak before easing.
The surge in energy costs has fueled inflation worries, influencing central banks’ decisions on interest rate adjustments.
Central banks maintained current interest rates this week, though with varying concerns.
The Federal Reserve kept rates steady but expressed worry about inflation.
Similarly, the Bank of England held its rates but outlined potential economic impacts from the Iran conflict.
One scenario detailed by the Bank of England suggests the war could necessitate a “forceful” rise in borrowing costs.
The US personal consumption expenditures price index rose by 0.7% last month, matching economists’ forecasts and representing the biggest jump since June 2022, according to the data.
Market expectations shifted in March from rate cuts to a possible hike, causing gold prices to occasionally drop below $4,500 per ounce.
“The longer the blockade of the Strait of Hormuz continues, the greater the downside risks for gold are likely to become,” Thu Lan Nguyen, head of FX and commodity research at Commerzbank AG, said in a report.
Conversely, the market is likely to react only very cautiously with gold purchases to any rapprochement between the US and Iran in the negotiations, as signals in this direction have recently tended to be disappointed rather quickly.
Oil retreats from 4-year highs
Following a four-year peak of over $126 a barrel, global oil prices declined on Thursday.
This retreat was driven by fears that an escalating US-Iran conflict could result in a prolonged disruption of Middle East oil supply, consequently harming global economic growth.
The market had initially risen earlier in the day following a late Wednesday report from Axios, which cited unidentified sources.
The report stated that US President Donald Trump was scheduled to receive a briefing on Thursday regarding plans for a series of military strikes against Iran.
The intention behind these strikes was reportedly to pressure Iran into returning to negotiations concerning its nuclear program.
Prices later dropped as demand for crude oil is expected to take a blow due to higher inflation and a slowdown in global economic activity.
Next Sunday, only seven of the eight producing nations that first agreed in April 2023 to production cuts beyond the OPEC+ level will meet virtually.
The UAE is withdrawing from OPEC and OPEC+ starting May 1.
The withdrawal has no immediate short-term impact because the Gulf region is currently producing significantly below its quota, a situation caused by the blockade of the Strait of Hormuz.
“Survey-based production estimates due for release in the coming days will show just how sharply oil production actually fell in April,” Barbara Lambrecht, commodity analyst at Commerzbank AG, said.
“The cartel is therefore powerless at the moment anyway. To maintain the appearance of normality, new production quotas could indeed be decided at the routine meeting at the beginning of the month, as in the previous month, now only for seven producer countries.”
At the time of writing, the June Brent contract was at $114.25 per barrel, down 3.2%, while the July contract was at $109.63 a barrel, down 0.7%.
The June contract expires on Thursday.
https://invezz.com/news/2026/04/30/commodity-wrap-gold-set-for-monthly-decline-brent-eases-from-4-year-high/
