Oil rebounded 5% from the previous session’s losses due to concerns about a prolonged war in the Middle East, which is likely to disrupt supplies.
On the other hand, gold and silver reversed Wednesday’s steep gains and fell sharply on a firmer dollar and worries about higher inflation.
Meanwhile, base metals were mixed with aluminium and zinc prices on the London Metal Exchange rising, while copper and nickel experiencing a fall.
Oil climbs 5%
Oil prices climbed sharply amid conflicting statements from the US and Iran on the prospects of a ceasefire.
Oil prices fluctuated throughout Wednesday, crossing the $100 per barrel mark in both directions, as the market reacted to conflicting reports concerning possible US-Iran negotiations.
Iran refused the 15-point US truce proposal, which sought to impose limits on its nuclear and missile programs.
Instead, Iran presented its own terms for ending the conflict, demanding security guarantees, reparations for damages, and recognition of its sovereignty over the Strait of Hormuz.
According to a Reuters report, the 15-point US plan, transmitted via Pakistan, outlines several requirements for Iran: eliminating its highly enriched uranium stockpiles, halting enrichment activities, restricting its ballistic missile development, and reducing financial support for its regional partners.
Tehran continues its attacks on Israel and Arab Gulf states, reportedly demanding crew and cargo details from vessels seeking Strait transit under its protection.
Iran’s Bushehr nuclear plant was allegedly attacked again after a mid-March strike, which the IAEA reported caused no reactor damage.
“Any credible de‑escalation could trigger a renewed risk‑on move, but for now uncertainty remains elevated,” Warren Patterson, head of commodities strategy at ING Economics, said in a note.
US oil inventories continued their upward trend, with the latest Energy Information Administration data indicating a substantial rise in crude stocks of 6.9 million barrels last week.
This marks the fifth straight week of increases and significantly surpasses the 2.3 million barrel build that was anticipated by the API.
The price of Brent crude was last at $107.79 per barrel, up 5.5%, while the West Texas Intermediate contract was at $94.48 per barrel, up 4.7% from the previous close.
Bullion gives back gains
Gold and silver prices gave back all the gains they accrued in the previous session as higher oil prices and a firmer dollar weighed on sentiment.
A slight rise in the US dollar’s value increased the cost of dollar-denominated gold for those holding other currencies.
Concerns about rising interest rates and inflation are weighing on the price of gold, according to Jim Wyckoff, a senior analyst at Kitco Metals.
If the conflict continues, prices could dip below $4,000, while a ceasefire and renewed rate-cut hopes could lift them back toward $5,000.
The appeal of gold, traditionally a hedge against uncertainty and inflation, diminishes in a higher interest rate environment. This is because rising yields increase the opportunity cost of holding the non-yielding metal.
Increased energy costs could intensify inflationary pressures across various economies.
Since the start of the US-Israeli war on Iran on February 28, gold prices have dropped by more than 15%.
New applications for US unemployment benefits increased marginally last week to 210,000.
This suggests the labor market remains stable, which gives the Federal Reserve flexibility to keep interest rates unchanged while it monitors inflation risks stemming from the conflict.
At the time of writing, the gold contract on COMEX was at $4,453.22 per ounce, down 2.9%, while silver was at $67.925 an ounce, down 6.6% from the previous close.
https://invezz.com/news/2026/03/26/commodity-wrap-oil-pops-5-on-mideast-conflict-gold-falls/
